UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒ Filed by a party other than the Registrant ¨☐
Check the appropriate box:
Preliminary Proxy Statement | ||
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||
Definitive Proxy Statement | ||
Definitive Additional Materials | ||
Soliciting Material Pursuant to §240.14a-12 |
FISERV, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required. | ||||
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
(1) | Title of each class of securities to which transaction applies:
| |||
(2) | Aggregate number of securities to which transaction applies:
| |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| |||
(4) | Proposed maximum aggregate value of transaction:
| |||
(5) | Total fee paid:
| |||
Fee paid previously with preliminary materials. | ||||
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | ||||
(1) | Amount previously paid:
| |||
(2) | Form, Schedule or Registration Statement No.:
| |||
(3) | Filing party:
| |||
(4) | Date Filed:
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255 Fiserv Drive
Brookfield, Wisconsin 53045
April 5, 20169, 2019
You are cordially invited to attend the annual meeting of shareholders of Fiserv, Inc. to be held at our office in Alpharetta, GeorgiaBrookfield, Wisconsin on Wednesday, May 18, 201622, 2019 at 10:00 a.m. (ET)(CT). This important day on the Fiserv calendar provides us with an opportunity to review our financial results and strategic progress in providing our clients, and their customers, innovative technology products and services.
Information about the meeting and the matters on which shareholders will act is set forth in the accompanying Notice of 20162019 Annual Meeting of Shareholders and Proxy Statement. Following action on these matters, we will present a report on our business activities. You can find financial and other information about Fiserv in our Form10-K for the fiscal year ended December 31, 2015.2018. We welcome your comments or inquiries about our business that would be of general interest to shareholders during the meeting.
We urge you to be represented at the annual meeting, regardless of the number of shares you own or whether you are able to attend the annual meeting in person, by voting as soon as possible. Shareholders can vote their shares via the Internet, by telephone or by mailing a completed and signed proxy card (or voting instruction form if you hold your shares through a broker).
Sincerely,
Jeffery W. Yabuki
President and Chief Executive Officer
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Notice of 2016 Annual Meeting of Shareholders
Notice of 2019 Annual Meeting of Shareholders |
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Time and Date:
Wednesday, May 18, 201622, 2019 at 10:00 a.m. (ET)(CT)
Place:
Fiserv, 2900 Westside Parkway, Alpharetta, Georgia 30004255 Fiserv Drive, Brookfield, Wisconsin 53045
Matters To Be Voted On:
1. | Election of |
2. | Approval of the Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan. |
3. | Approval, on an advisory basis, of the compensation of our named executive officers. |
Ratification of appointment of Deloitte & Touche LLP as our independent registered public accounting firm for |
Shareholder proposal |
Any other business as may properly come before the annual meeting or any adjournments or postponements thereof. |
Who Can Vote:
Holders of Fiserv stock at the close of business on March 21, 2016.25, 2019.
Date of Mailing:
On April 5, 2016,9, 2019, we beganwill commence mailing the notice of Internet availability of proxy materials, or a proxy statement, proxy card and annual report, to shareholders.
By orderOrder of the boardBoard of directors,
Directors,
Lynn S. McCreary
Secretary
April 5, 20169, 2019
Important notice regarding the availability of proxy materials for the shareholder meeting to be held on May 18, 2016:22, 2019: The proxy statement, 20152018 Annual Report on Form10-K and the means to vote by Internet are available at http://www.proxyvote.com.
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Proxy Statement Table of Contents
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Security Ownership of Certain Beneficial Owners and Management | ||||
Proposal 2. Approval of the Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan | 30 | |||
55 | ||||
65 | ||||
Proposal | ||||
Appendix B – Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan | 75 |
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This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. |
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting.
Annual Meeting
|
Time and Date: | Wednesday, May | |
Place: | Fiserv
| |
Record Date: | March | |
Voting: | Shareholders as of the record date are entitled to |
Proxy Statement
This proxy statement is furnished in connection with the solicitation on behalf of the board of directors of Fiserv, Inc., a Wisconsin corporation, of proxies for use at our 20162019 annual meeting of shareholders. This proxy statement is being made available on or about April 9, 2019 to our shareholders entitled to vote at the annual meeting on or about April 5, 2016.meeting.
Purposes of Annual Meeting
Agenda Item
| Agenda Item
| Board Vote
| Page Reference for More Detail
| Agenda Item
| Board Vote Recommendation
| Page Reference for More Detail
| ||||||
1. | Election of Directors The board of directors has nominated eleven individuals for election as directors. All nominees are currently serving as directors and all, except Mr. Yabuki, our President and Chief Executive Officer, are independent. We believe that each nominee for director has the requisite experience, integrity and sound business judgment to serve as a director.
| FOR each Director Nominee | 11 | Election of Directors The board of directors has nominated ten individuals for election as directors. All nominees are currently serving as directors and all, except Mr. Yabuki, our president and chief executive officer, are independent. We believe that each nominee for director has the requisite experience, integrity and sound business judgment to serve as a director.
| FOR each Director Nominee | 12 | ||||||
2. |
Advisory Vote on Named Executive Officer Compensation The board of directors is asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. Our compensation program for named executive officers is designed to create long-term shareholder value by rewarding performance as described in the Compensation Discussion and Analysis section of this proxy statement.
|
FOR |
27 | Approval of Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan(“Amended ESPP”) Our board of directors is seeking shareholder approval of the Amended ESPP to allow employees to continue to have the opportunity to purchase shares of our common stock on favorable terms in order to further align their interests with those of our shareholders.
| FOR | 30 | ||||||
3. |
Ratification of Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm As a matter of good corporate governance, the audit committee of the board of directors is seeking ratification of its appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2016. |
FOR |
57 |
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Agenda Item
| Board Vote Recommendation
| Page Reference for More Detail
| ||||
3. | Advisory Vote on Named Executive Officer Compensation The board of directors is asking shareholders to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement. Our compensation program for our named executive officers is designed to create long-term shareholder value by rewarding performance as described in the “Compensation Discussion and Analysis” section of this proxy statement.
| FOR | 34 | |||
4. | Ratification of Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm As a matter of good corporate governance, the audit committee of the board of directors is seeking ratification of its appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2019.
| FOR | 67 | |||
5. | Shareholder Proposal Requesting a Political Contribution Report (if properly presented) We are already subject to political contribution limits and disclosure requirements under federal, state and local laws. Because this proposal would not provide meaningful additional information to shareholders, as further described herein, we do not believe that this proposal is in the best interest of our company or our shareholders.
| AGAINST | 69 |
Executing on Our Strategy In 2018, we generated GAAP revenue growth of 2% and internal revenue growth of 4.5% compared to 2017 as well as GAAP earnings per share from continuing operations of $2.87 and adjusted earnings per share of $3.10. This represents a slight increase in GAAP earnings per share from continuing operations, and a 25% increase in adjusted earnings per share, compared to 2017, in each case as adjusted for thetwo-for-one split of our common stock completed in March 2018. We had net cash provided by operating activities of $1.55 billion and free cash flow of $1.31 billion in 2018, a 5% and 7% increase, respectively, compared to the prior year. We also made progress in strategic areas that we believe will enhance our future results, and we continued to enhance our level of competitive differentiation which we believe is essential to sustaining future growth. As discussed further in the “Compensation Discussion and Analysis” section of this proxy statement, our named executive officer compensation for 2018 was paid or awarded in the context of these results. Internal revenue growth, adjusted earnings per share and free cash flow arenon-GAAP financial measures. See Appendix A to this proxy statement for information regarding these measures and reconciliations to the most directly comparable GAAP measures. Recent Governance Matters In 2018, we added a new independent director to our board, making him the fourth new independent director to join our board in the last five years. |
Agenda Item
| Board Vote
| Page Reference for More Detail
| ||||
4. |
Shareholder Proposal on Proxy Access (if properly presented) After engaging with shareholders and reviewing current market practices, on February 19, 2016, our board of directors amended our by-laws to implement proxy access.Because we have already implemented proxy access, this proposal is unnecessary and not in the best interests of our shareholders.
|
AGAINST |
59 |
Executing on Our Strategy
We delivered solid results in 2015 highlighted by internal revenue growth of 4% and adjusted earnings per share of $3.87, a 15% increase over 2014. We made progress in strategic areas that we believe will enhance our future results, and we continued to enhance our level of competitive differentiation which we believe is essential to sustaining future growth. As discussed further in the Compensation Discussion and Analysis section of this proxy statement, our named executive officer compensation for 2015 was paid or awarded in the context of these results.
Internal revenue growth and adjusted earnings per share are non-GAAP financial measures. See Appendix A to this proxy statement for information regarding these measures and a reconciliation to the most directly comparable GAAP measures.
Governance Highlights
On February 19, 2016, our board of directors amended our by-laws to implement proxy access in the form that it believes is most appropriate for our company and our shareholders and is consistent with current market practices. Specifically, the by-laws provide that any shareholder or group of up to 20 shareholders that beneficially owns at least 3% of our outstanding common stock continuously for three years and that complies with the procedures set forth in our by-laws may nominate up to the greater of two individuals or 20% of the board of directors for election to the board and require us to include such nominees in our proxy materials. Our board adopted proxy access after considering various potential formulations of proxy access and engaging with a number of our shareholders who provided valuable feedback on the subject of proxy access.
In 2015, we added a new, independent director to our board of directors, representing the fourth independent director who has joined our board since 2012. We also enhanced the evaluation of our annual board, committee and individual director performance to help ensure that our board of directors and committees are comprised of directors with the necessary skills and experience to best represent our company and shareholders.
Compensation Highlights
For 2015, we paid cash incentive awards to named executive officers generally around target because, although we exceeded our target adjusted earnings per share and, if applicable, target consolidated net operating profit performance goals, our internal revenue growth results were below target. The named executive officers received annual equity incentive awards in 2015 at or above target levels. The value of equity compensation we granted to our chief executive officer as a percentage of his total compensation remained comparable with 2014 and was three times the cash compensation paid to him. As a group, 85% of the compensation paid to our named executive officers was in the form of incentive awards, and three-quarters of the total incentive awards were in the form of equity. In addition, more than three-quarters of the aggregate equity awards granted to our named executive officers in 2015 were in the form of stock options,
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02 |
which are inherently performance-based and deliver value only to the extent that the price of our stock increases.
In 2015, our executive officers executed amendments to their outstanding equity award agreements to enable our executive officers to retain their equity awards following a qualified retirement, subject to compliance with ongoing non-competition, confidentiality and other obligations, which further align their long-term interests with those of our shareholders as they approach possible retirement. In addition, in early 2016, our compensation committee began granting performance share units to certain executive officers. These performance share units have a three-year performance period, and the number of shares issued at vesting will be based on the company’s achievement of internal revenue growth goals, subject to attaining a threshold level of adjusted income from continuing operations over such three-year period.
In 2016, we entered into amendments to the employment agreement and key executive employment and severance agreement with our chief executive officer. Under the amendments, he will continue to serve as our president and chief executive officer for at least another three-year term followed by automatic one-year renewals, and we eliminated the excise tax gross-up provisions in his agreements.
We encourage you to review the “Compensation Discussion and Analysis” section of this proxy statement as well as the tabular and narrative disclosure under “Executive Compensation.”
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Recent Compensation Matters In 2018, our compensation committee granted performance share units to all our named executive officers with a three-year performance period. The number of shares issued at vesting will be based on the company’s achievement of internal revenue growth goals (60%) and total shareholder return as compared to the S&P 500 Index (40%), subject to attaining a threshold level of adjusted income from continuing operations over such three-year period. In 2018, about three-quarters of the compensation we awarded to all our named executive officers was in the form of equity. In 2018, to further align the terms of the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive Plan (the “Incentive Plan”) with current best practices, our compensation committee approved amendments to our Incentive Plan to, among other things, impose aone-year minimum vesting requirement for equity awards, prohibit the cash buyout of underwater stock options, and clarify that certain shares cannot bere-credited to the Incentive Plan reserve. Our compensation committee also added a performance objective to our named executive officers’ cash incentive awards for 2018 performance based on the committee’s assessment of progress with respect to strategic initiatives including employee engagement and client initiatives. We encourage you to review the entire “Compensation Discussion and Analysis” section of this proxy statement as well as the tabular and narrative disclosure under “Executive Compensation.” Recent Developments On January 16, 2019, we announced that we had entered into a definitive merger agreement to acquire First Data Corporation (“First Data”) in anall-stock transaction for an equity value of approximately $22 billion as of the announcement. The transaction is expected to close during the second half of 2019, subject to customary closing conditions, regulatory approvals and shareholder approval for both companies. The special meeting of Fiserv shareholders to approve the issuance of shares in connection with the transaction will be held on April 18, 2019 and is subject to a separate notice of special meeting and joint proxy and consent solicitation statement/prospectus. Fiserv and First Data have agreed to certain governance terms in the merger agreement which will become effective as of the effective time of the merger. At the effective time, the Fiserv chief executive officer will continue to serve as the chief executive officer of Fiserv and become the chairman of the board of directors of Fiserv, and the First Data chief executive officer will become the president and chief operating officer of Fiserv and will serve as a Fiserv director. In addition, at the effective time of the merger, the board of directors of Fiserv will consist of ten directors. Six of the directors will be individuals designated by Fiserv, consisting of five independent directors of Fiserv and the Fiserv chief executive officer, and four of the directors will be individuals designated by First Data, consisting of two independent directors of First Data, the First Data chief executive officer and one director of First Data designated by and affiliated with New Omaha Holdings L.P. (“New Omaha”), which is expected to own approximately 16% of our outstanding shares upon the closing of the merger, in accordance with a shareholder agreement between Fiserv and New Omaha. At the effective time, a director designated by Fiserv will be appointed as the lead independent director of the board. In addition, at the effective time, the board of directors of Fiserv will have at least three standing committees: (1) an audit committee; (2) a compensation committee; and (3) a nominating and corporate governance committee, each with three to four members and at least one qualified director designated by First Data. At the effective time, the chairperson of the compensation committee will be a director designated by First Data. As of the date of this proxy statement, other than as indicated above, the individuals to serve on the Fiserv board at the effective time have not been determined. We encourage you to review the “Corporate Governance – First Data Transaction” section of this proxy statement for a more detailed description of anticipated corporate governance changes. |
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Compensation Practices
What We Do | ||||||||
| Our compensation committee | |||||||
performance objectives.
| We provide cash incentive awards based on achievement of annual performance | In | ||||||
| We have a stock ownership policy that requires our directors and executive officers to acquire and maintain a significant amount of Fiserv equity | |||||||
long-term shareholders.
| We have a policy that prohibits our directors and executive officers from hedging or pledging Fiserv stock. | |||||||
| We have a compensation recoupment, or “clawback,” policy. |
What We Don’t Do | ||||||
| ||||||
We don’t provide separate pension programs or a supplemental executive retirement plan to our named executive officers. | ||||||
We don’t have excise taxgross-up arrangements with any of our executive officers. | We generally don’t provide significant personal-benefit perquisites to our named executive officers. |
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04 |
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Board Nominees
The board met fiveseven times during 20152018 and each of our directors attended 75% or more of the aggregate number of meetings of the board and the committees on which he or she served, in each case while the director was serving on our board of directors or such committees, as applicable, during 2015.2018. The following table provides summary information on each director nominee. All candidates were nominated in accordance with the company’s governance guidelines. The following table provides summary information on each director nominee. For more information about each director nominee, please see their full biographies beginning on page 12.13. In addition, please see page 24 for more information on how the proposed acquisition of First Data would impact the composition of our board of directors.
Name
| Age
| Director Since
| Principal Occupation
| Independent
| Current Committee Memberships
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Alison Davis | 57 | 2014 | Advisor, Fifth Era | Audit | ||||||||||||||||||||||||||||||||
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Harry F. DiSimone | 64 | 2018 | President, Commerce Advisors, Inc. | Compensation | ||||||||||||||||||||||||||||||||
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John Y. Kim | 58 | 2016 | Retired; Former President, New York Life Insurance Company
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Dennis F. Lynch | 70 | 2012 | Retired; Former Chairman, Cardtronics plc |
| Compensation
Nominating |
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Denis J. O’Leary | 62 | 2008 | Investor |
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Glenn M. Renwick | 63 | 2001 | Chairman, Fiserv, Inc. | |||||||||||||||||||||||||||||||||
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Kim M. Robak | 63 | 2003 | Partner, Mueller Robak, LLC |
| Compensation
Nominating |
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JD Sherman | 53 | 2015 | President and Chief Operating Officer, HubSpot, Inc. | Audit | ||||||||||||||||||||||||||||||||
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Doyle R. Simons | 55 | 2007 | Retired; Former President and Chief Executive Officer, Weyerhaeuser Company
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Jeffery W. Yabuki | 59 | 2005 | President and Chief Executive Officer, Fiserv, Inc. | |||||||||||||||||||||||||||||||||
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* Committee Chair
Name
| Age
| Director
| Principal Occupation
| Independent
| Current Committee
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Daniel P. Kearney * | 76 | 1999 | Financial Consultant | |||||||||||||||||
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Alison Davis | 54 | 2014 | Advisor, Fifth Era | Audit | ||||||||||||||||
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Christopher M. Flink | 44 | 2012 | Partner, IDEO | Audit
Nominating and Corp. Governance | ||||||||||||||||
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Dennis F. Lynch | 67 | 2012 | Chairman, Cardtronics, Inc. | Compensation | ||||||||||||||||
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Denis J. O’Leary | 59 | 2008 | Investor | Audit
Nominating and Corp. Governance | ||||||||||||||||
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Glenn M. Renwick + | 60 | 2001 | Chairman, President and Chief Executive Officer, The Progressive Corporation | Compensation | ||||||||||||||||
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Kim M. Robak + | 60 | 2003 | Partner, Mueller Robak, LLC | Nominating and Corp. Governance | ||||||||||||||||
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JD Sherman | 50 | 2015 | President and Chief Operating Officer, HubSpot, Inc. | Audit | ||||||||||||||||
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Doyle R. Simons | 52 | 2007 | President and Chief Executive Officer, Weyerhaeuser Company | Compensation | ||||||||||||||||
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Thomas C. Wertheimer + | 75 | 2003 | Financial Consultant | Audit | ||||||||||||||||
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Jeffery W. Yabuki | 56 | 2005 | President and Chief Executive Officer, Fiserv, Inc. | |||||||||||||||||
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* Chairman of the Board + Committee Chair.
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The board of directors of Fiserv, Inc., a Wisconsin corporation, is soliciting proxies in connection with our annual meeting of shareholders to be held on Wednesday, May 22, 2019 at 10:00 a.m. (CT), or at any adjournment or postponement of the meeting. On April 9, 2019, we will commence mailing the notice of Internet availability of proxy materials, or a proxy statement, proxy card and annual report, to shareholders entitled to vote at the annual meeting. |
The board of directors of Fiserv, Inc., a Wisconsin corporation, is soliciting proxies in connection with our annual meeting of shareholders to be held on Wednesday, May 18, 2016 at 10:00 a.m. (ET), or at any adjournment or postponement of the meeting. On or about April 5, 2016, we mailed the notice of Internet availability of proxy materials, or a proxy statement, proxy card and annual report, to all shareholders entitled to vote at the annual meeting.
Notice of Internet Availability of Proxy Materials
In accordance with rules and regulations adopted by the Securities and Exchange Commission, we may furnish our proxy statement and annual report to shareholders of record by providing access to those documents via the Internet instead of mailing printed copies. The notice you received regarding the Internet availability of our proxy materials (the “Notice”) provides instructions on how to access our proxy materials and cast your vote
Shareholders’ access to our proxy materials via the Internet allows us to reduce printing and delivery costs and lessen adverse environmental impacts. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions in the Notice for requesting those materials.
Solicitation of Proxies
We will pay the cost of soliciting proxies on behalf of the board of directors. Our directors, officers and other employees may solicit proxies by mail, personal interview, telephone or electronic communication. None of them will receive any special compensation for these efforts.
We have retained the services of Georgeson | reimburse such record holders for the reasonableout-of-pocket expenses incurred by them in connection with forwarding proxy materials. | Proxies solicited hereby will be tabulated by an inspector of election, who will be designated by the board of directors and will not be an employee or director of Fiserv, Inc.
Holders Entitled to Vote
The board of directors has fixed the close of business on March
All of these shares are to be voted as a single class, and you are entitled to cast one vote for each share you held as of the record date on all matters submitted to a vote of shareholders.
Voting Your Shares
You may vote:
By Internet Visit www.proxyvote.com
By telephone Dial toll-free1-800-690-6903
By mailing your proxy card If you requested a printed copy of the proxy materials, mark your vote on the proxy card, sign and date it, and return it in the enclosed envelope.
In person If you are a shareholder of record you may join us in person at the annual meeting to be held at our |
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Voting through the Internet or by telephone. You may direct your vote by proxy without attending the annual meeting. You can vote by proxy overvia the Internet or by telephone until 11:59 p.m. (ET) on May 17, 201621, 2019 by following the instructions provided in the Notice. Shareholders voting via the Internet or by telephone will bear any costs associated with electronic or telephone access, such as usage charges from Internet access providers and telephone companies.
Voting by proxy card. If you requested a printed copy of the proxy materials, you may vote by returning a proxy card that is properly signed and completed. The shares represented by that card will be voted as you have specified.
Banks, brokers or other nominees.Shareholders who hold shares through a bank, broker or other nominee may vote by the methods that their bank or broker makes available, in which case the bank or broker will include instructions with the Notice or this proxy statement. If you wish to vote in person at the annual meeting, you must obtain a legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the annual meeting.
401(k) savings plan.An individual who has a beneficial interest in shares of our common stock allocated to his or her account under the Fiserv, Inc. 401(k) savings plan may vote the shares of common stock allocated to his or her account. We will provide instructions to participants regarding how to vote. If no direction is provided by the participant about how to vote his or her shares by 11:59 p.m. (ET) on May 15, 2016,19, 2019, the trustee of the Fiserv, Inc. 401(k) savings plan will vote the shares in the same manner and in the same proportion as the shares for which voting instructions are received from other participants, except that the trustee, in the exercise of its fiduciary duties, may determine that it must vote the shares in some other manner.
Proxies
Daniel P. Kearney,Glenn M. Renwick, Chairman of the board of directors, Jeffery W. Yabuki, President and Chief Executive Officer, and Lynn S. McCreary, Chief Legal Officer and Secretary, have been selected by the board of directors as proxy holders and will vote
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
shares represented by valid proxies. All shares represented by valid proxies received and not
revoked before they are exercised will be voted in the manner specified in the proxies.
If nothing is specified, the proxies will be voted: to elect“FOR” each of the board’s nominees for director; to approve the compensation of our named executive officers as disclosed in this proxy statement; to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm;“FOR” proposals two, three and against the shareholderfour; and “AGAINST” proposal relating to proxy access,five, if properly presented at the annual meeting.
Our board of directors is unaware of any other matters that may be presented for action at our annual meeting. If other matters do properly come before the annual meeting or any adjournments or postponements thereof, it is intended that shares represented by proxies will be voted in the discretion of the proxy holders.
You may revoke your proxy at any time before it is exercised by doing any of the following:
However, if your shares are held of record by a bank, broker or other nominee, you must obtain a proxy issued in your name from the record holder.
Quorum
The presence, in person or by proxy, of at least a majority of the outstanding shares of common stock entitled to vote at the annual meeting will constitute a quorum for the transaction of business. Holders of shares that abstain from voting or that are subject to a brokernon-vote will be counted as present for the purpose of determining the presence or absence of a quorum for the transaction of business. In the event there are not sufficient votes for a quorum or to approve a proposal at the time of the annual meeting, the annual meeting may be adjourned or postponed, in our sole discretion, in order to permit the further solicitation of proxies.
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07 |
Required Vote
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Required Vote | ||||||||||
Proposal
| Voting Standard | |||||||||
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1. | Election of directors | A director will be elected if the number of shares voted “for” that director’s election exceeds the number of votes cast “withheld” with respect to that director’s election.
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2. | To approve the Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan | To be approved, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal. | ||||||||
3. | To approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement
| To be approved, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal. | ||||||||
4. | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for | To be approved, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal.
| ||||||||
5. | To vote on a shareholder proposal
| To be approved, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal. |
For each of these proposals, abstentions and broker non-votes will be entirely excluded from the vote and will have no effect on its outcome.
For each of these proposals, abstentions and broker non-votes will be entirely excluded from the vote and will have no effect on its outcome. |
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08 |
Security Ownership of Certain Beneficial Owners and Management |
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The following table sets forth information with respect to the beneficial ownership of our common stock as of March 1, 2019 by: each current director and director nominee; each executive officer appearing in the Summary Compensation Table; all directors and executive officers as a group; and any person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock based on our review of the reports regarding ownership filed with the Securities and Exchange Commission in accordance with Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). |
The following table sets forth information with respect to the beneficial ownership of our common stock as of March 10, 2016 by: each current director and director nominee; each executive officer appearing in the Summary Compensation Table; all directors and executive officers as a group; and any person who is known by us to beneficially own more than 5% of the outstanding shares of our common stock based on our review of the reports regarding ownership filed with the Securities and Exchange Commission in accordance with Sections 13(d) and 13(g) of the Exchange Act.
Name and Address of Beneficial Owner(1)
| Number of Shares of
| Percent of Class(3)
| ||||||
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T. Rowe Price Associates, Inc.(4) 100 E. Pratt Street Baltimore, Maryland 21202 | 31,253,227 | 14.0% | ||||||
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The Vanguard Group, Inc.(5) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 19,906,233 | 8.9% | ||||||
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BlackRock, Inc.(6) 55 East 52nd Street New York, New York 10055 | 14,118,869 | 6.3% | ||||||
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Jeffery W. Yabuki | 2,703,532 | 1.2% | ||||||
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Thomas J. Hirsch | 116,982 | * | ||||||
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Mark A. Ernst | 399,910 | * | ||||||
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Kevin P. Gregoire | 66,615 | * | ||||||
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Byron C. Vielehr | 56,325 | * | ||||||
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Alison Davis | 2,054 | * | ||||||
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Christopher M. Flink | 14,403 | * | ||||||
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Daniel P. Kearney | 80,255 | * | ||||||
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Dennis F. Lynch | 17,163 | * | ||||||
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Denis J. O’Leary | 77,571 | * | ||||||
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Glenn M. Renwick | 137,259 | * | ||||||
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Kim M. Robak | 70,843 | * | ||||||
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JD Sherman | — | * | ||||||
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Doyle R. Simons | 76,547 | * | ||||||
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Thomas C. Wertheimer | 56,958 | * | ||||||
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All directors and executive officers as a group (19 people) | 4,234,010 | 1.9% | ||||||
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* Less than 1%.
Name and Address of Beneficial Owner(1)
| Number of Shares of Beneficially Owned(2)
| Percent of Class(3)
| ||||||||||||||
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T. Rowe Price Associates, Inc.(4) 100 E. Pratt Street Baltimore, Maryland 21202 | 42,970,342 | 11.0% | ||||||||||||||
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The Vanguard Group, Inc.(5) 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 42,550,220 | 10.9% | ||||||||||||||
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BlackRock, Inc.(6) 55 East 52nd Street New York, New York 10055 | 31,345,393 | 8.0% | ||||||||||||||
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Massachusetts Financial Services Company(7) 111 Huntington Avenue Boston, Massachusetts 02199 | 23,638,796 | 6.0% | ||||||||||||||
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Jeffery W. Yabuki | 3,801,741 | 1.0% | ||||||||||||||
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Robert W. Hau | 168,628 | * | ||||||||||||||
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Lynn S. McCreary | 189,225 | * | ||||||||||||||
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Devin B. McGranahan | 67,441 | * | ||||||||||||||
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Byron C. Vielehr | 439,712 | * | ||||||||||||||
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Alison Davis | 25,372 | * | ||||||||||||||
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Harry F. DiSimone | 2,239 | * | ||||||||||||||
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John Y. Kim | 9,759 | * | ||||||||||||||
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Dennis F. Lynch | 55,590 | * | ||||||||||||||
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Denis J. O’Leary | 125,283 | * | ||||||||||||||
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Glenn M. Renwick | 303,529 | * | ||||||||||||||
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Kim M. Robak | 99,808 | * | ||||||||||||||
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JD Sherman | 20,230 | * | ||||||||||||||
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Doyle R. Simons | 179,116 | * | ||||||||||||||
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All directors and executive officers as a group (15 people) | 5,559,134 | 1.4% | ||||||||||||||
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* Less than 1%.
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(1) Unless otherwise indicated, the address for each beneficial owner is care of Fiserv, Inc., 255 Fiserv Drive, Brookfield, Wisconsin 53045.
(2) All information with respect to beneficial ownership is based upon filings made by the respective beneficial owners with the Securities and Exchange Commission or information | provided to us by such beneficial owners. Except as indicated in the footnotes to this table, the persons named in the table have | sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws. |
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09 | 2019 Proxy Statement |
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Includes stock options, which, as of March |
8,388; Mr. Lynch – Includes |
Includes shares deferred under vested restricted stock |
Also includes shares eligible for issuance in connection with the deferral of cash compensation that, based on deferral elections and the terms of the Mr. Yabuki is a trustee of the Yabuki Family Foundation which holds |
(3) | On March | non-employee director deferred compensation plan that may be distributed within 60 days, are deemed outstanding for the purposes of calculating the number and percentage owned by such shareholder but not deemed outstanding for the purpose of calculating the percentage of any other person. |
(4) | Based on a Schedule 13G filed by T. Rowe Price Associates, Inc. (“Price Associates”) on February |
Exchange Commission, which indicates that these securities are owned by various individual and institutional investors for which Price Associates serves as investment adviser and with power to direct investments and/or sole power to vote the securities. According to the Schedule 13G, Price Associates exercises sole voting power over |
(5) | Based on a Schedule 13G filed by The Vanguard Group, Inc. (“Vanguard Group”) on February |
(6) | Based on a Schedule 13G filed by BlackRock, Inc. (“BlackRock”) on February |
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10 | 2019 Proxy Statement |
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dividends from, or the proceeds from the sale of, these securities. According to the Schedule 13G, BlackRock exercises sole voting power over |
(7) | Based on a Schedule 13G filed by Massachusetts Financial Services Company (“MFS”) on February 13, 2019 with the Securities and Exchange Commission, which indicates that these securities are owned by MFS and/or certain othernon-reporting entities. According to the Schedule 13G, MFS exercises sole voting power over 22,733,822 of the securities and sole dispositive power over 23,638,796 of the securities. |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
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Proposal 1. Election of Directors
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All directors will be elected to hold office for a term expiring at the next annual meeting of shareholders and until their successors have been elected and qualified. Please see below under “Corporate Governance – First Data Transaction” for a description of how the proposed acquisition of First Data would impact the composition of our board of directors.
All of the nominees for election as director at the annual meeting are incumbent directors. No nominee for director has been nominated pursuant to any agreement or understanding between us and any person, and there are no family relationships among any of our directors or executive officers. These nominees have consented to serve as a director if elected, and management has no reason to believe that any nominee will be unable to serve. Unless otherwise specified, the shares of common stock represented by the proxies solicited hereby will be voted in favor of the nominees proposed by the board of directors. In the event that any director nominee becomes unavailable forre-election as a result of an unexpected occurrence, shares will be voted for the election of such substitute nominee, if any, as the board of directors may propose. The affirmative vote of a majority of votes cast is required for the election of directors.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Ourby-laws provide that each director will be elected by the majority of the votes cast with respect to that director’s election at any meeting of shareholders for the election of directors, other than a contested election. A majority of the votes cast means that the number of votes cast “for” a director’s election exceeds the number of votes cast “withheld” with respect to that director’s election. In a contested election, each director will be elected by a plurality of the votes cast with respect to that director’s election. Once our chairman of the board determines that a contested election exists in accordance with ourby-laws, the plurality vote standard will apply at a meeting at which a quorum is present regardless of whether a contested election continues to exist as of the date of such meeting.
Ourby-laws further provide that, in an uncontested election of directors, any nominee for director who is already serving as a director and receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will promptly tender his or her resignation. The nominating and corporate governance committee of the board of directors will then promptly consider the tendered resignation, and the committee will recommend to the board whether to accept or reject it. Following the board’s decision, we will promptly file a Current Report on Form8-K with the Securities and Exchange Commission that sets forth the board’s decision whether to accept the resignation as tendered, including a full explanation of the process by which the decision was reached and, if applicable, the reasons for rejecting the tendered resignation. Any director who tenders a resignation pursuant to this provision will not participate in the committee recommendation or the board consideration regarding whether to accept the tendered resignation.
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Each person listed below is nominated for election to serve as a director until the next annual meeting of shareholders and until his or her successor is elected and qualified.The board of directors recommends that you vote in favor
Each person listed below is nominated for election to serve as a director until the next annual meeting of shareholders and until his or her successor is elected and qualified. Please see below under “Corporate Governance – First Data Transaction” for a description of how the proposed acquisition of First Data would impact the composition of our board of directors.The board of directors recommends that you vote “FOR” each of its nominees for director.
|
| |||||
Alison Davis,
• Director since 2014
• Audit Committee member
• Experience in global financial services, corporate strategy and financial management | Ms. Davis is an advisor to Fifth Era, a firm that invests in and incubates early stage technology companies, and previously served as its Managing Partner from 2011 to 2015. Prior to Fifth Era, she was the Managing Partner of Belvedere Capital Partners, Inc., a private equity firm serving the financial services sector, from 2004 to 2010. Prior to joining Belvedere, she served as Chief Financial Officer for Barclays Global Investors, an institutional asset manager that is now part of BlackRock, Inc., from 2000 to 2003, a senior partner at A.T. Kearney, Inc., a leading global management consulting firm, from 1993 to 2000, and a consultant at McKinsey & Company, another leading global management consulting firm, from 1984 to 1993.
In the past five years, in addition to Fiserv, Ms. Davis has served as a director at the following publicly traded companies: Royal Bank of Scotland Group plc (current), a British bank holding company,
The board concluded that Ms. Davis should be a director of the company because of her extensive experience in global financial services, corporate strategy and financial management.
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| |||||
• Director since
•
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| Mr.
Mr. DiSimone previously advised a number of retail banking and payment organizations, including The Direct Marketing Association (now known as The Data & Marketing Association), the NYCE Payment Network, Chase Paymentech, MasterCard’s U.S. Business Committee, Visa Global Advisors, the New York Clearing House’s Strategic Planning Committee and the Federal Reserve Bank’s Payment Card Council.
The board concluded that Mr.
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John Y. Kim, 58 • Director since 2016 • Audit Committee member • Experience in the financial services industry | Mr. Kim served as President of New York Life Insurance Company, a mutual life insurance company, from 2015 until his retirement in 2018. From 2008, Mr. Kim served in various other positions at New York Life, including as its Chief Investment Officer from 2011 to 2015; President of the Investments Group from 2012 to 2015; and Chief Executive Officer and President of New York Life Investments from 2008 to 2012. Prior to joining New York Life in 2008, Mr. Kim was President of Prudential Retirement, a provider of retirement plan solutions, and its predecessor organization, CIGNA Retirement and Investment Services, from 2002 to 2007. Mr. Kim also served as Chief Executive Officer of Bondbook, an electronic bond trading company, from 2001 to 2002; President and CEO of Aeltus Investment Management Inc., now known as ING Investment Management Company, from 1994 to 2000; and Managing Director of Mitchell Hutchins Asset Management, Inc., now part of UBS Global Asset Management, from 1993 to 1994. In the past five years, in addition to Fiserv, Mr. Kim has served on the board of trustees of Eversource Energy (current), a publicly traded public utility holding company, and as a director at New York Life Insurance and Annuity Corporation (former), a wholly owned life insurance subsidiary of New York Life and registered investment company. The board concluded that Mr. Kim should be a director of the company because of his extensive experience in the financial services industry. | |||||
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14 | 2019 Proxy Statement |
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Dennis F. Lynch,
• Director since 2012
• Nominating and Corporate Governance Committee chair and Compensation Committee member
• Experience in the payments industry | Mr. Lynch is
In the past five years, in addition to Fiserv, Mr. Lynch
The board concluded that Mr. Lynch should be a director of the company because he has over 30 years of experience in the payments industry and is a leader in the introduction and growth of payment solutions.
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Denis J. O’Leary,
• Director since 2008
• Audit Committee chair and Nominating and Corporate Governance Committee member
• Experience in the banking, technology and information services industries | Mr. O’Leary is a private investor, and from 2009 to 2015, he served as
The board concluded that Mr. O’Leary should be a director of the company because of his extensive knowledge
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15 | 2019 Proxy Statement |
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Glenn M. Renwick, • Chairman since 2017
• Director since 2001
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and information technology | Mr. Renwick
In the past five years, in addition to Fiserv, Mr. Renwick has served as a director at the following publicly traded companies:
The board concluded that Mr. Renwick should be a director of the company because he is an accomplished business leader with
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Kim M. Robak,
• Director since 2003
• Nominating and Corporate Governance Committee
• Experience in government and technology | Ms. Robak has been a partner at Mueller Robak, LLC, a government relations firm, since 2004. Prior to that, Ms. Robak was Vice President for External Affairs and Corporation Secretary at the University of Nebraska from 1999 to 2004. Ms. Robak served as the Lieutenant Governor of the State of Nebraska from 1993 to 1999, as Chief of Staff from 1992 to 1993, and as Legal Counsel from 1991 to 1992.
Ms. Robak also currently serves as a director at Ameritas Mutual Holding Company, a privately held provider of life insurance, annuities, and mutual funds, Ameritas Life Insurance Corporation, a privately held life insurance company, and Union Bank & Trust Company, a privately held financial institution.
The board concluded that Ms. Robak should be a director of the company because she is an accomplished businessperson
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16 | 2019 Proxy Statement |
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JD Sherman,
• Director since 2015
• Audit Committee member
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and the information technology industry | Mr. Sherman has served as Chief Operating Officer of HubSpot, Inc., a publicly traded provider of
In the past five years, in addition to Fiserv, Mr. Sherman
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Doyle R. Simons,
• Director since 2007
• Compensation Committee
• Experience in senior management, financial and legal matters | Mr. Simons
In the past five years, in addition to Fiserv, Mr. Simons
The board concluded that Mr. Simons should be a director of the company because he is an accomplished businessperson with diverse experiences in senior management, | |||||
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| |||||
Jeffery W. Yabuki,
• Director since 2005
•
positions including as chief executive officer of the company | Mr. Yabuki has served as our President and Chief Executive Officer since 2005. Before joining Fiserv, Mr. Yabuki served as Executive Vice President and Chief Operating Officer for H&R Block, Inc., a financial services firm, from 2002 to 2005. From 2001 to 2002, he served as Executive Vice President of H&R Block and from 1999 to 2001, he served as the President of H&R Block International. From 1987 to 1999, Mr. Yabuki held various executive positions with American Express Company, a financial services firm, including President and Chief Executive Officer of American Express Tax and Business Services, Inc.
In the past five years, in addition to Fiserv, Mr. Yabuki has served as a director at Royal Bank of Canada (current), a publicly traded financial institution. Mr. Yabuki also currently serves as a director at Ixonia Bancshares, Inc., a privately held bank holding company.
The board concluded that Mr. Yabuki should be a director of the company because he has extensive senior management experience and serves as the chief executive officer of the company.
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At a Glance
Name
| Independent
| Audit Committee
| Compensation
| Nominating and
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Glenn M. Renwick Chairman of the Board | ||||||||||||||||||||||
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Alison Davis | ||||||||||||||||||||||
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Harry F. | ||||||||||||||||||||||
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John Y. Kim | ||||||||||||||||||||||
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Dennis F. Lynch | C | |||||||||||||||||||||
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Denis J. O’Leary | ||||||||||||||||||||||
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Kim M. Robak | ||||||||||||||||||||||
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JD Sherman | ||||||||||||||||||||||
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Doyle R. Simons | C | |||||||||||||||||||||
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Jeffery W. Yabuki | ||||||||||||||||||||||
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C = Committee Chair
Director Independence
Our board of directors has determined that Alison Davis,
Board Meetings and Attendance
During our fiscal year ended December 31,
Directors are expected to attend each annual meeting of shareholders. All of the directors serving | on the board at the time of our | Board Leadership
Upon the completion of our proposed acquisition of First Data, the roles of chief executive officer and chairman of the board will be combined, and we will appoint a lead director who is |
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the timely flow of relevant information, which supports effective board decision-making and provides a useful connection between the board and management allowing for board actions to be appropriately and efficiently executed.
Annual Board and Committee Self-Assessments
The board of directors considers the performance of the board and of individual directors, and each committee of the board reviews its performance, on an annual basis. Our board believes that a meaningful annual evaluation process promotes good governance practices and enhances the effective functioning of the board.
Questionnaires
Directors anonymously complete individual, board and board committee evaluations.
Annual Results
With respect to individual director performance evaluations, the chairman of the board reviews the survey results and discusses each director’s performance with the relevant director. The results of the board evaluations are reviewed and discussed by the nominating and corporate governance committee and the board. Each committee discusses the results of its performance survey and shares the results with the full board.
Action Plans
The board and its committees take the foregoing discussions into account and, as appropriate, update their practices or areas of focus to continuously improve the operation and performance of the board and its committees.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
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20 | 2019 Proxy Statement |
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Committees of the Board of Directors
Our board of directors has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. The directors currently serving on these committees satisfy the independence requirements of the NASDAQ Marketplace Rules applicable to such committees, including the enhanced independence requirements for members of the audit committee and compensation committee. Each of these committees has the responsibilities set forth in written charters adopted by the board of directors. We make copies of each of these charters available free of charge on our website at http://investors.fiserv.com/documents.cfm.corporate-governance. Other than the text of the charters, we are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this proxy statement. Please see below under “Corporate Governance – First Data Transaction” for a description of how the proposed acquisition of First Data would impact the composition of the committees of our board of directors.
Audit Committee
| ||||
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| |||
Mr.
Ms. Davis
Mr.
Mr. Sherman Number of Meetings held in 7 | Duties:
The audit committee’s primary role is to provide independent review and oversight of our financial reporting processes and financial statements, system of internal controls, audit process and results of operations and financial condition. The audit committee is directly and solely responsible for the appointment, compensation, retention, termination and oversight of our independent registered public accounting firm. Each of the members of the audit committee is independent, as defined by applicable NASDAQ and Securities and Exchange Commission rules. The board of directors has determined that Ms. Davis and Messrs. Kim, O’Leary | |||
Compensation Committee
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Mr. Mr. DiSimone
Mr. Lynch
Number of Meetings held in 4 | Duties:
The compensation committee of the board of directors is responsible for overseeing executive officer compensation. The compensation committee’s responsibilities include: approval of executive officer compensation and benefits; administration of our equity incentive plans including compliance with executive stock ownership requirements; and approval of severance or similar termination payments to executive officers. Each of the members of the compensation committee is anon-employee director and “independent” as defined by applicable NASDAQ rules. Additional information regarding the compensation committee and our policies and procedures regarding executive compensation, including, among other matters, our use of compensation consultants and their role, and management’s role, in determining compensation, is provided below under the heading “Compensation Discussion and Analysis – Determining and Structuring Compensation – Determining Compensation.” | |||
Nominating and Corporate Governance Committee
|
| |||
Mr. O’Leary Ms. Robak Number of Meetings held in
| Duties:
The nominating and corporate governance committee assists the board of directors to identify and evaluate potential director nominees, and recommends qualified nominees to the board of directors for consideration by the shareholders. The nominating and corporate governance committee also oversees our corporate governance policies and |
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Nominations of Directors
The nominating and corporate governance committee recommends to the full board of directors the nominees to stand for election at our annual meeting of shareholders and to fill vacancies occurring on the board. In this regard, the nominating and corporate governance committee regularly assesses the appropriate size of the board of directors and whether any vacancies on the board of directors are expected due to retirement or otherwise. In the event that vacancies are anticipated or otherwise arise, the committee utilizes a variety of methods to identify and evaluate director candidates. Candidates may come to the attention of the committee through current directors, professional search firms, shareholders or other persons.
The committee evaluates prospective nominees in the context of the then current constitution of the board of directors and considers all factors it believes appropriate, which include those set forth in our governance guidelines. Our governance guidelines provide that a majority of our board of directors should have diverse backgrounds with outstanding business experience, proven ability and significant accomplishments through other enterprises to enable the board of directors to represent a broad set of capabilities and viewpoints. Other than as set forth in our governance guidelines, the committee does not have a formal policy with respect to diversity. The board of directors and the nominating and corporate governance committee believe the following minimum qualifications must be met by a director nominee to be recommended by the committee:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
In addition, the nominating and corporate governance committee seeks to have at least one director who is an “audit committee financial expert” under Item 407(d)(5) of RegulationS-K under the Securities Exchange Act, of 1934 (the “Exchange Act”), and we must have at least one director (who may also be an “audit committee financial expert”) who, in accordance with the NASDAQ Marketplace Rules, has past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the individual’s financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
In making recommendations to the board of directors, the nominating and corporate governance committee examines each director candidate on acase-by-case basis regardless of who recommended the candidate. The committee will consider shareholder-recommended director candidates in accordance with the foregoing and other criteria set forth in our governance guidelines and the Nominating and Corporate Governance Committee Charter. Recommendations for consideration by the committee must be submitted in writing to the chairman of the board and/or president and the chairman of the nominating and corporate governance committee together with appropriate biographical information concerning each proposed candidate. The committee does not evaluate shareholder-recommended director candidates differently than any other director candidate.
We recently amended our Ourby-laws to include a provision pursuant to which a shareholder, or group of up to 20 shareholders, owning continuously for at least three years shares of our stock representing an aggregate of at least 3% of our outstanding shares may nominate and include in our proxy material director nominees constituting up to 20% of our board of directors – so called “proxy access.” Alternatively, a shareholder may
nominate director nominees under ourby-laws that the shareholder does not intend to have included in our proxy materials. In either case, such shareholders must comply with the procedures set forth in ourby-laws, including that
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22 | 2019 Proxy Statement |
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the shareholders and nominees satisfy the requirements in ourby-laws and our corporate Secretary receives timely written notice, in proper form, of the intent to make a nomination at an annual meeting of shareholders. The detailed requirements for nominations are set forth in ourby-laws, which were attached as an exhibit to our Annual Report on Form10-K filed with the Securities and Exchange Commission on February 19, 2016. A copy of ourby-laws will be provided upon written request to our corporate Secretary. Additional requirements regarding shareholder proposals and director nominations, including the dates by which notices must be received, are described below under the heading “Other Matters – Shareholder Proposals for the 20172020 Annual Meeting.”
Risk Oversight
Our management is responsible for managing risk, and our board of directors is responsible for overseeing management. To discharge this responsibility, the board seeks to be informed about the risks facing the company so that it may evaluate actual and potential risks and understand how management is addressing such risks. To this end, the board, as a whole and at the committee level, regularly receives reports from management about risks faced by the company. For example, the board of directors regularly receives reports directly from our chief executive officer about, among other matters, developments in our industry so that the board may evaluate the competitive and other risks faced by the company. In addition, our chief financial officer, at each meeting of the board, presents information regarding our financial performance and condition in an effort to understand financial risks faced by the company. Furthermore, at each meeting,
Cybersecurity is a significant area of focus for our board of directors. The board of directors regularly receives cybersecurity updates regarding cybersecurity events, evolving cybersecurity threats, the status of our ongoing cybersecurity programs, and planned initiatives designed to continue to enhance our cybersecurity practices. The audit committee of the board receives a cybersecurity updatereports at eachin-person meeting from our chief executiverisk officer, our chief information officer, the head of our corporate audit function, and senior management regarding our operations, including operational risks and security matters. Our chief risk officer chiefoversees
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Fiserv’s enterprise risk management program. The program encompasses our business continuity planning, incident management, risk assessment, operational regulatory compliance, insurance and information officer or chief legal officer, or a combinationsecurity policies across all Fiserv businesses and support functions. Our corporate audit function audits, among other matters, our compliance with Fiserv operating protocols and ensures the remediation of the foregoing, in each case dependingvariations. These regular reports are periodically augmented with presentations focused on the focus of the matters under review.cybersecurity.
As discussed above, the positions of chief executive officer and Chairmanchairman currently are held by different individuals. We believe that historically a separate Chairmanchairman position enhanceshas enhanced the effectiveness of our board’s risk oversight
function by providing leadership to the board that is independent from those tasked with managing the risk profile of our company. After the effective time of our proposed acquisition of First Data, the positions of chief executive officer and chairman will be held by the same individual, and we will also have a lead independent director. We believe that the lead independent director will continue to enable effective board oversight of risk by providing leadership to the board that is independent from management.
The committees of the board also play a critical role in the board’s ability to collect and assess information. The audit committee’s charter charges it with a variety of risk-related oversight duties, including:
At each of its quarterly meetings, the audit committee receives reports from our chief audit executive regarding significant audit findings during the quarter and management’s responses thereto. In addition, the committee regularly receives reports from our chief compliance officer and chief risk officer. Our chief risk officer leads our enterprise risk and resilience group which operates Fiserv’s enterprise risk management program. The program encompasses our business continuity planning, incident management, risk assessment, operational regulatory compliance, insurance and information security across all Fiserv businesses and support functions.
Our compensation committee regularly receives reports about our compensation programs and policies to enable it to oversee management’s administration of compensation-related risks.
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23 | 2019 Proxy Statement |
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The nominating and corporate governance committee also works closely with our chief legal officer and the members of the board to seek to manage risks associated with director and executive officer succession, the independence of the directors, conflicts of interest and other corporate governance related matters.
Communications with the Board of Directors
Shareholders may communicate with our board of directors or individual directors by submitting communications in writing to us at 255 Fiserv Drive, Brookfield, Wisconsin 53045, Attention: Lynn S. McCreary, Chief Legal Officer and Secretary. Communications will be delivered directly to our board of directors or individual directors, as applicable.
Review, Approval or Ratification of Transactions with Related Persons
Our board of directors hasWe have adopted a written policy requiring that allany related person transactionstransaction that would require disclosure under Item 404(a) of RegulationS-K under the Exchange Act be reviewed and approved by our audit committee or, if the audit committee is not able to review the transaction for any reason, a majority of our disinterested directors. A related person transaction under our policy is one that would require disclosure under Item 404(a) of Regulation S-K under the Exchange Act. Compensation matters regarding our executive officers or directors are
reviewed and approved by our compensation committee. The policy also provides that, at least annually, eachany such ongoing, previously approved related person transaction is to be reviewed by the body that originally approved the transaction: to ensure that it is being pursued in accordance with all of the understandings and commitments made at the time that it was previously approved; to ensure that the commitments being made with respect to such transaction are appropriately reviewed and documented; and to affirm the continuing desirability of and need for the related person arrangement.
All relevant factors with respect to a proposed related person transaction will be considered, and such a transaction will only be approved if it is in our and our shareholders’ best interests or, if an alternate standard of review is imposed by applicable laws, statutes, governing documents or
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listing standards, if such alternate standard of review is satisfied.
First Data Transaction
On January 16, 2019, we announced that we had entered into a definitive merger agreement to acquire First Data Corporation in anall-stock transaction for an equity value of approximately $22 billion as of the announcement. The transaction is expected to close during the second half of 2019, subject to customary closing conditions, regulatory approvals and shareholder approval for both companies.
Fiserv and First Data have agreed to certain governance terms in the merger agreement which would become effective upon the completion of the proposed acquisition.
Chairman and Chief Executive Officer. The merger agreement provides that, at the effective time, the Fiserv chief executive officer will continue to serve as the chief executive officer of Fiserv and will become the chairman of the Fiserv board.
President and Chief Operating Officer. The merger agreement provides that, at the effective time, the First Data chief executive officer will become the president and chief operating officer of Fiserv and will serve as a Fiserv director.
Fiserv AmendedBy-laws. Fiserv and First Data have agreed to certain other governance terms in the merger agreement and that, prior to the closing, Fiserv will take all actions necessary to cause theby-laws of Fiserv as in effect immediately prior to the closing, to be amended and restated as of the effective time to reflect such governance terms. Pursuant to such amended and restatedby-laws, the governance terms described below will remain in place beginning on the closing date and ending immediately following the conclusion of the second annual meeting of Fiserv’s shareholders following the closing date (the “specified period”), and any changes to such governance terms in theby-laws during the specified period will require the approval of at least 70% of the Fiserv board.
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Board of Directors. During the specified period, the Fiserv board will be comprised of ten directors, of which:
As of the date of this proxy statement, other than as indicated above, the individuals to serve on the Fiserv board at the effective time have not been determined.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Lead Director and Committees of the Fiserv Board of Directors. During the specified period:
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25 | 2019 Proxy Statement |
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Objectives for Director Compensation
Qualitynon-employee directors are critical to our success. We believe that the two primary duties ofnon-employee directors are to effectively represent the long-term interests of our shareholders and to provide guidance to management. As such, our compensation program fornon-employee directors is designed to meet several key objectives:
Elements of Director Compensation
The compensation committee of the board of directors reviewsnon-employee director compensation every other year and considers our financial performance, general market conditions andnon-employee director compensation at the peer group companies set forth below under “Compensation Discussion and Analysis – Structuring Compensation – Peer Group.” Based on such review,In May 2018, our compensation committee recommended, and our board approved, awarding equity to ournon-employee directors solely in 2015, we increased the cash retainer amountsform of restricted stock units, rather than stock options and restricted stock units, and increasing the value of the annual equity awards paidaward received by our
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
non-employee directors by $20,000 to better align our non-employee directorsdirector compensation with market practice. In addition, to recognize the time, effortpromote share ownership and responsibilities expectedto further align our directors’ long-term interests with those of our shareholders, in 2018, we amended our stock ownership policy to more than double the total value of our common stock that directors and better align their compensation with directors at peer companies.are required to own.
We believe that the following components of our director compensation program support the objectives above:
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.
Non-Employee Director Deferred
Compensation Plan
Under ournon-employee director deferred compensation plan, eachnon-employee director may defer up to 100% of his or her cash fees. Based on his or her deferral election, the director is credited with a number of share units at the time he or she would have otherwise received the portion of the fees being deferred. In addition, eachnon-employee director may defer receipt of up to 100% of shares due upon vesting of restricted stock units, and based on his or her election, the director is credited with one share unit for the receipt of each such share that is deferred. Share units are equivalent to shares of our common stock except that share units have no voting rights.
Upon cessation of service on the board, the director receives a share of our common stock for each share unit. SharesDirectors elect whether the shares are received in a lump sum distribution or in annual installments over two to fifteen years, and any fractional share units are paid in cash. Share units credited to a director’s account are considered awards granted under the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive Plan (the “Incentive Plan”) and count against that plan’s share reserve.
Stock Ownership Requirements
Under our stock ownership policy,non-employee directors are required to accumulate and hold our common stock having a market value equal to at least sixfour times the amountsum of the annual board retainer.retainer amount plus the value of the annual equity award.
Non-employee directors have five years after they become subject to the policy to meet the ownership requirements provided that interim ownership milestones are achieved during the five-year period. Allnon-employee directors are in compliance with our stock ownership policy.
Director Compensation Program
As discussed further above under “ – Elements of Director Compensation,” in 2015, we increased the cash retainer amounts and value of equity awards paid to our non-employee directors. Our 2015 non-
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
employeeDirector Compensation Program
Our 2018non-employee director compensation program is summarized below on an annualized basis:
Element of Compensation
| Through
| From
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Board Retainer | $ | 60,000 | $ | 78,000 | ||||||||
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Chairman’s | 100,000 | 145,000 | ||||||||||
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Committee Retainer | ||||||||||||
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Audit | 12,000 | 15,000 | ||||||||||
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Compensation | 10,000 | 15,000 | ||||||||||
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Nominating and Corporate Governance | 10,000 | 15,000 | ||||||||||
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Committee Chair Retainer | ||||||||||||
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Audit | 7,500 | 10,000 | ||||||||||
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Compensation | 7,500 | 10,000 | ||||||||||
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Nominating and Corporate Governance | 7,500 | 10,000 | ||||||||||
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Equity Awards ($)(2) | ||||||||||||
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Stock Options | 86,000 | |||||||||||
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Restricted Stock Units | 86,000 | |||||||||||
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Element of Compensation(1) | 2018 | |||||||
Board Retainer | $ | 78,000 | ||||||
Chairman’s Retainer | 145,000 | |||||||
Committee Retainer | ||||||||
Audit | 15,000 | |||||||
Compensation | 15,000 | |||||||
Nominating and Corporate Governance | 15,000 | |||||||
Committee Chair Retainer | ||||||||
Audit | 10,000 | |||||||
Compensation | 10,000 | |||||||
Nominating and Corporate Governance | 10,000 | |||||||
Equity Awards ($)(2) | ||||||||
Restricted Stock Units | 192,000 | |||||||
(1) | The chairman’s retainer is in addition to the standard board retainer, and the committee chair retainer is in addition to the standard committee retainer. |
(2) | Upon being elected as a director at our annual meeting of shareholders in |
Unvested restricted stock units held by Fiserv directors who cease to serve on the Fiserv board of directors following the closing of our proposed acquisition of First Data may vest and up to the balance of the annual retainer may be paid, in either case, subject to the approval of our compensation committee. Please see above under “Corporate Governance – First Data Transaction” for a description of how the proposed acquisition of First Data would impact the composition of our board of directors.
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Name
| Fees Earned or
| Stock Awards ($)(2)
| Option Awards ($)(2)
| Total ($)
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Alison Davis(3) | 82,500 | 86,058 | 86,002 | 254,560 | ||||||||||||||||||||
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Christopher M. Flink(4) | 95,000 | 86,058 | 86,002 | 267,060 | ||||||||||||||||||||
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Daniel P. Kearney(5) | 161,500 | 86,058 | 86,002 | 333,560 | ||||||||||||||||||||
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Dennis F. Lynch(6) | 81,500 | 86,058 | 86,002 | 253,560 | ||||||||||||||||||||
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Denis J. O’Leary(7) | 95,000 | 86,058 | 86,002 | 267,060 | ||||||||||||||||||||
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Glenn M. Renwick(8) | 90,250 | 86,058 | 86,002 | 262,310 | ||||||||||||||||||||
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Kim M. Robak(9) | 90,250 | 86,058 | 86,002 | 262,310 | ||||||||||||||||||||
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JD Sherman(10) | 23,250 | 43,017 | 43,016 | 109,283 | ||||||||||||||||||||
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Doyle R. Simons(11) | 81,500 | 86,058 | 86,002 | 253,560 | ||||||||||||||||||||
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Thomas C. | 91,250 | 86,058 | 86,002 | 263,310 | ||||||||||||||||||||
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.
2018 Director Compensation
Name
| Fees Earned or Paid in Cash ($)(1)
| Stock Awards ($)(2)
| Option Awards ($)(2)
| Total ($)
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Alison Davis(3)
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| 93,000 |
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| 192,037 |
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| — |
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| 285,037 |
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Harry F. DiSimone(4)
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| 79,826 |
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| 213,566 |
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| 21,504 |
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| 314,896 |
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John Y. Kim(5)
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| 93,000 |
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| 192,037 |
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| — |
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| 285,037 |
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Dennis F. Lynch(6)
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| 114,071 |
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| 192,037 |
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| — |
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| 306,108 |
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Denis J. O’Leary(7)
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| 118,000 |
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| 192,037 |
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| — |
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| 310,037 |
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Glenn M. Renwick(8)
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| 223,000 |
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| 192,037 |
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| — |
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| 415,037 |
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Kim M. Robak(9)
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| 111,929 |
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| 192,037 |
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| — |
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| 303,966 |
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JD Sherman(10)
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| 93,000 |
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| 192,037 |
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| — |
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| 285,037 |
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Doyle R. Simons(11)
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| 103,000 |
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| 192,037 |
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| — |
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| 295,037 |
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(1) This column includes the following amounts that were deferred under ournon-employee director deferred compensation plan, anon-qualified defined contribution plan: Mr. DiSimone – $39,913; Mr. Kim – $93,000; Mr. O’Leary
(2) In March 2018, we completed atwo-for-one split of our common stock. Accordingly, all amounts are presented on a split-adjusted basis. Mr. DiSimone joined the board on February 21, 2018, and we granted him a pro rata number of restricted stock units (308) and stock options (960) based on the number of days between the date of his appointment and May 23, 2018, the date of the next annual meeting of shareholders, and (i) in the case of restricted stock units, using the closing price of our common stock on February 21, 2018 of $69.90 and (ii) in the case of stock options, using the binomial valuation of an option of one share of our common stock on February 21, 2018. We granted eachnon-employee director,
|
The dollar amount shown in the table is the grant date fair value of the award. Information about the assumptions that we used to determine the fair value of equity awards is set forth in our Annual Report onForm 10-K in Note
(3) As of December 31,
(4) Mr. DiSimone’s cash compensation includes pro rata compensation for service as a member of the board and our compensation committee beginning on February 21, 2018. As of December 31,
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(5) | As of December 31, |
units.
(6) | Mr. Lynch’s cash compensation includes pro rata compensation for service as chair of our nominating and corporate governance committee beginning on May 23, 2018. As of December 31, |
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28 | 2019 Proxy Statement |
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(7) | As of December 31, |
(8) | As of December 31, |
(9) | Ms. Robak’s cash compensation includes pro rata compensation for service as chair of our nominating and |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
As of December 31, |
(11) | As of December 31, |
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Proposal 2. Advisory Vote to Approve Executive Compensation
Proposal 2. Approval of the Fiserv, Inc. Amended and Restated |
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Background
Our board of directors is seeking shareholder approval of the Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan (the “Amended ESPP”). We originally adopted the Fiserv, Inc. Employee Stock Purchase Plan (the “ESPP”) effective January 1, 2000 to allow our eligible employees and those of our designated participating subsidiaries to purchase shares of our common stock at a discount. Effective as of January 1, 2010, we amended and restated the ESPP upon shareholder approval to extend the term of the ESPP until January 1, 2020, among other amendments. On February 19, 2019, our compensation committee approved the Amended ESPP, subject to shareholder approval, to further extend the term to July 1, 2029, among other amendments. The Amended ESPP is subject to the requirements of Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
A copy of the Amended ESPP is attached to this proxy statement as Appendix B.
Key Amendments
We amended and restated the ESPP primarily to:
Description of the Amended ESPP
Purpose of the Amended ESPP
The purpose of the Amended ESPP is to allow employees to continue to have the opportunity to purchase shares of our common stock on favorable terms and thereby acquire and enlarge their stake in our growth and earnings which further aligns their interests with the interests of our shareholders.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Shares Subject to the ESPP
Under the Amended ESPP, a total of 25,000,000 shares of our common stock will be available for purchase by participants from and after July 1, 2019, including the shares purchased under anysub-plans. This share limit is subject to appropriate adjustments to reflect stock splits and other changes in our capitalization as described under “Adjustments” below. This share reserve amount represents approximately 6.4% of our outstanding shares as of March 1, 2019.
Previously, the ESPP provided for an automatic increase each year to the shares available for purchase, based on a formula set forth in the plan. This type of automatic increase is often referred to as an “evergreen” provision. We have removed that evergreen provision from the Amended ESPP.
Eligibility and Participation
All of our employees and the employees of our designated subsidiaries are eligible to participate in the Amended ESPP. Designated subsidiaries include all of our subsidiaries which are located in the United States, unless we determine otherwise. We may, however, exclude any or all of the following employees from participation: (1) employees who normally work five or fewer months per year, (2) employees who normally work 20 or fewer hours per week, (3) employees who have been employed by us or our designated subsidiaries for less than 2 years, (4) employees who are “officers” within the meaning of Rule16a-1(f) under the Exchange Act, and (5) employees who are “highly compensated employees” under Section 423 of the Code.
Participants may elect, prior to the beginning of each offering period, to have up to 10% (or a lesser amount as we determine) of their gross compensation deducted from their pay during the offering period. The amounts withheld from payroll may be used by us for any corporate purpose, are not segregated and do not earn interest. On the last business day of the offering period, unless the participant has previously withdrawn from the plan or terminated employment, the amounts withheld from the participant’s compensation are used to purchase shares of our common stock at a price equal to 85% of its then current fair market value. The offering periods are quarterly, although our
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30 | 2019 Proxy Statement |
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compensation committee may change the duration of the offering period to no more than 27 months (or such period as may be permitted under Section 423 of the Code) for the Amended ESPP or any limit imposed by applicable law for anysub-plan. We may shorten any offering period as needed to properly administer the Amended ESPP, such as, for example, upon the termination of the Amended ESPP or upon the occurrence of a change in control of the company.
No employee may, however, purchase more than $25,000 in market value of our common stock (determined on the respective purchase dates) during any calendar year. Furthermore, no employee may purchase common stock under the Amended ESPP if, after the purchase, he or she would own, or would hold options to purchase, 5% or more of the total outstanding shares of our common stock.
Delivery of Shares
Shares purchased by a participant under the Amended ESPP are deposited into an account with a transfer agent or securities brokerage firm chosen by us. Once the shares are deposited into the account, the participant may sell some or all of the shares, although we may require a participant to hold those shares in their account for a specified period of time.
Sub-Plans
The Amended ESPP allows us to implementsub-plans to permit employees outside of the United States to purchase shares under the Amended ESPP. Any suchsub-plans would not be considered qualified plans under Section 423 of the Code. Shares purchased under anysub-plan would count against the Amended ESPP’s overall share reserve, and employees eligible to purchase shares would be subject to the same individual limits on purchases as described above, including the limit that no more than 10% of their compensation may be used to purchase shares. The terms of thesub-plan may differ from the Amended ESPP, provided that if anysub-plan provides that we will issue “matching” shares or provide a matching contribution to a participant who purchases shares under thesub-plan, then the price at which the participant may purchase such shares must be the
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fair market value of a share on the date of purchase and the number of matching shares or the amount of the matching contribution may not exceed 25% of the participant’s share purchase.
Adjustments
Our board of directors or compensation committee will adjust the maximum number or type of shares available for purchase under the Amended ESPP as well as the maximum number or type of shares a participant may purchase each offering period to reflect any change to our common stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of our common stock, or any other increase or decrease in the number of issued shares of our common stock, excluding conversion of any convertible securities.
Administration, Amendment and Duration of the ESPP
The Amended ESPP is administered by our compensation committee and by our officers.
Our board of directors or compensation committee may amend the Amended ESPP, provided that any amendment which increases the number of shares issuable under the Amended ESPP or changes the eligibility requirements for employees requires shareholder approval.
The Amended ESPP will remain in effect until July 1, 2029, unless terminated earlier by our board of directors or compensation committee or extended by our board of directors and compensation committee upon shareholder approval.
United States Federal Income Tax Treatment
For United States tax purposes, the Amended ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Participant contributions to the Amended ESPP in the form of payroll deductions areafter-tax contributions and are subject to normal income and payroll tax withholding requirements. However, there are no tax consequences associated with the acquisition and ownership of shares of common stock purchased under the
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31 | 2019 Proxy Statement |
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Amended ESPP until the participant sells the shares, disposes of them by gift, or dies. The tax treatment upon disposition of the shares depends on whether the shares are disposed of within the two year required holding period, which is measured from the date the option to purchase such shares was granted to the participant. The required holding period is also satisfied if the participant dies while holding shares acquired under the Amended ESPP.
A participant who does not satisfy thetwo-year holding period must pay ordinary income tax, at the time of the disposition of the shares, on the 15% discount on the purchase price, even if the market price of the stock at the time the stock is disposed of is lower than the purchase price. The difference between the amount received at disposition and the fair market value of the shares on the date of purchase will be a capital gain or loss.
If the participant holds the shares of common stock for at least two years, or dies while owning the shares, at the time of disposition of the shares, ordinary income tax must be paid on an amount equal to the lesser of: (1) 15% of the fair market value of a share on the date the option to purchase such stock was granted to the participant; or (2) the amount, if any, by which the market price at the time of disposition exceeds the purchase price. The basis of the shares of common stock purchased will be the purchase price plus any ordinary income recognized. Any amount received at disposition in excess of the adjusted basis of the stock will be capital gain. If the shares are sold for less than the purchase price, the difference between the sale price and the purchase price will be a capital loss.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
If the disposition does not satisfy the requiredtwo-year holding period, the disposition is called a “disqualifying disposition.” If a disqualifying disposition occurs, we will be entitled to a tax deduction equal to the amount that the participant includes as ordinary income in the year in which the disqualifying disposition occurs. We do not receive a deduction at the time of disposition if the participant meets the holding period requirements.
Future Plan Benefits
The Amended ESPP does not have any outstanding grants subject to shareholder approval and no future issuances of common stock which may be awarded have been determined, approved or granted. Each of our executive officers is eligible to purchase up to $25,000 worth of our common stock each calendar year under the Amended ESPP at a discount to the applicable market price.Non-employee directors are not eligible to purchase shares under the Amended ESPP. Participation in the Amended ESPP is voluntary and depends on each eligible employee’s election to participate and on his or her election regarding payroll deductions. Accordingly, future purchases by executive officers and other eligible employees under the Amended ESPP are not determinable. We currently have approximately 19,000 employees who are eligible to participate in the Amended ESPP.
On March 25, 2019, the closing price per share of our common stock on the Nasdaq Global Select Market was $85.26.
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32 | 2019 Proxy Statement |
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Equity Compensation Plan Information
The table below sets forth information with respect to compensation plans under which equity securities are authorized for issuance as of December 31, 2018.
(a)
| (b)
| (c)
| ||||||||||||||||||||||
Plan Category
| Number of shares to be issued upon exercise of outstanding options, warrants and rights
| Weighted-average exercise price of outstanding options, warrants and rights
| Number of shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
| |||||||||||||||||||||
Equity compensation plans approved by our shareholders(1)
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| 12,715,853
| (2)
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| $33.96
| (3)
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| 35,491,411
| (4)
| |||||||||||||||
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| ||||||||||||||||||
Equity compensation plans not approved by our shareholders
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| N/A
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| N/A
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| N/A
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| |||||||||||||||
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|
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| ||||||||||||||||||
Total
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| 12,715,853
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| $33.96
| (3)
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| 35,491,411
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| |||||||||||||||
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(1) Columns (a) and (c) of the table above do not include 1,681,038 unvested restricted stock units outstanding under the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive Plan (the “Incentive Plan”) or 25,336,020 shares authorized for issuance under the ESPP as of December 31, 2018. The ESPP will expire on January 1, 2020 unless Proposal 2 is approved, in which case the shares authorized for issuance under the Amended ESPP will be 25,000,000 from and after July 1, 2019. (2) Consists of options outstanding under the Incentive Plan as well as 524,290 shares subject to performance share units at the target award level under the Incentive Plan and 140,009 shares subject tonon-employee director deferred compensation notional units under the Incentive Plan. | (3) Represents the weighted average exercise price of outstanding options and does not take into account outstanding performance share units ornon-employee director deferred compensation notional units. (4) Reflects the number of shares available for future issuance under the Incentive Plan. |
Vote Required and Recommendation of the Board of Directors
To approve the Amended ESPP, the votes cast “for” the proposal must exceed the votes cast “against” the proposal. Unless otherwise specified, the proxies solicited hereby will be voted to approve the Amended ESPP.
The board of directors recommends that you vote “FOR” Proposal 2.
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33 | 2019 Proxy Statement |
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Background
We are conducting anon-binding, advisory vote to approve the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, in accordance with Section 14A of the Exchange Act (commonly referred to as “Say-on-Pay”“Say-on-Pay”). Our shareholders previously expressed a preference that we holdSay-on-Pay votes on an annual basis, and our board of directors accordingly determined to holdSay-on-Pay votes every year until the next required advisory vote on the frequency of futureSay-on-Pay votes.
Proposed Resolution
We encourage shareholders to review the Compensation“Compensation Discussion and AnalysisAnalysis” section of this proxy statement as well as the tabular and narrative disclosure under the heading “Executive Compensation.” Our compensation program for our named executive officers is designed to create long-term shareholder value by rewarding performance and includes the following key factors for 2015:2018:
• We delivered solid results in
• Our compensation committee
• We have: (i) a stock ownership policy that requires our executive officers to maintain a substantial investment in
• We do not have excise taxgross-up arrangements with any of our executive officers. | • We provided compensation in the form of cash incentive awards based on achievement of annual performance
• • Our compensation committee granted performance share units to all named executive officers. The number of shares issued at vesting will be determined by the company’s achievement of performance goals over a three-year period. • About three-quarters of the compensation that we
•
• We generally did not provide significant perquisites to our named executive officers in
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The board endorses the compensation of our named executive officers and recommends that you vote in favor of the following resolution:
“RESOLVED, that the shareholders hereby approve, on an advisory basis, the compensation of the company’s named executive officers as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including under the heading “Compensation‘Compensation Discussion and Analysis”Analysis’ and in the tabular and narrative disclosures under the heading “Executive‘Executive Compensation.’”
Vote Required, Effect of Vote and Recommendation of the Board of Directors
To approve, on an advisory basis, the compensation of our named executive officers as disclosed in this proxy statement, the number of votes cast “for”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
the proposal must exceed the number of votes cast “against” the proposal. Unless otherwise specified, the proxies solicited hereby will be voted in favor of this proposal.
Because the vote is advisory, it will not be binding upon the board or the compensation committee, and neither the board nor the compensation committee will be required to take any action as a result of the outcome of the vote on this proposal. Although the outcome of this vote is advisory, the compensation committee will carefully consider the outcome of the vote when considering future executive compensation decisions to the extent it can determine the cause or causes of any significant negative voting results.
The board of directors recommends that you vote in favor of“FOR” Proposal 2.3.
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Compensation Discussion and Analysis
Executive Summary
Named Executive Officer | Title | |||
| ||||
Jeffery W. Yabuki | President and Chief Executive Officer | |||
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Robert W. | Chief Financial Officer and | |||
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Lynn S. McCreary | Chief | |||
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Devin B. McGranahan | Senior Group President | |||
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Byron C. Vielehr |
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Chief Administrative Officer | ||||
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Overview
The Compensation Discussion and Analysis portion of this proxy statement is designed to provide you with information regarding our executive compensation philosophy, how we determine and structure executive compensation, including the factors we consider in making compensation decisions, and our executive compensation policies. The Compensation Discussion and Analysis focuses on the compensation of the executive officers identified above (our “named executive officers”).
Our Business
Our | help us achieve our objectives by “paying for performance,” thereby aligning the interests of our executive officers with those of our shareholders. |
Stock Split In March 2018, we completed atwo-for-one split of our common stock. Accordingly, all per share amounts are presented on a split-adjusted basis and, where applicable, rounded up to the nearest whole cent. 2018 Business Highlights
Internal revenue growth,
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Executive Compensation Practices
Our compensation program is designed to create long-term value for our shareholders by rewarding performance and sustainable growth. The table below summarizes our current compensation practices as well as those practices we have not implemented because we do not believe they advance the goals of our compensation program:
What We Do
| Our compensation committee | |||||||
performance objectives.
| We provide cash incentive awards based on achievement of annual performance | In | ||||||
| We have a stock ownership policy that requires our directors and executive officers to acquire and maintain a significant amount of Fiserv equity | |||||||
long-term shareholders.
| We have a policy that prohibits our directors and executive officers from hedging or pledging Fiserv stock. | |||||||
| We have a compensation recoupment, or “clawback,” policy. |
What We Don’t Do
What We Don’t Do | ||||||
| ||||||
We don’t provide separate pension programs or a supplemental executive retirement plan to our named executive officers. | ||||||
We don’t have excise taxgross-up arrangements with any of our executive officers. | We generally don’t provide significant personal-benefit perquisites to our named executive officers. |
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2015 Compensation Matters
For 2015, we paid cash incentive awards to named executive officers generally around target because although we exceeded our target adjusted earnings per share and, if applicable, target consolidated net operating profit performance goals, our internal revenue growth results were below target. The named executive officers received annual equity incentive awards in 2015 at or above target levels. The value of equity compensation we granted to our chief executive officer as a percentage of his total compensation remained comparable with 2014 and was three times the cash compensation paid to him. As a group, 85% of the compensation that we paid to our named executive officers was in the form of incentive awards, and three-quarters of the total incentive awards were in the form of equity. In addition, more than three-quarters of the aggregate equity awards granted to our named executive officers were in the form of stock options, which are inherently performance-based and deliver value only to the extent that the price of our stock increases.
Recent Developments
In 2015, our executive officers executed amendments to their outstanding equity award agreements to revise the criteria for retirement and post-retirement treatment of such awards. Following a qualified retirement and subject to compliance with ongoing non-competition, confidentiality and other obligations, unvested equity awards held by an executive officer will continue to vest on their original vesting schedule as if the executive officer had not ceased to be an employee, and vested stock options will remain exercisable until the earlier of five years following retirement or the original expiration date of the stock option. Prior to the modifications, all unvested options and a pro rata portion of restricted stock units granted to our executive officers would vest immediately upon retirement. The modifications apply to both previously granted awards and awards to be granted in the future. The compensation committee approved these changes to enable our executive officers to better align their long-term interests with those of our shareholders and to retain the potential value of their awards as they approach possible retirement.
In early 2016, our compensation committee began granting performance share units to certain executive officers. For certain executive officers, the performance share units represent additional compensation; for others they simply change the overall mix of equity incentive awards granted. The
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2018 Compensation Matters
For 2018, we continued using financial performance measures focused on driving revenue growth and profitability to determine cash incentive awards, and we added a performance objective based on the compensation committee’s assessment of our progress with respect to strategic initiatives. With respect to the financial results that impacted compensation in 2018, we generally met or exceeded the performance goals for cash incentive awards.
In 2018, we granted performance share units granted in early 2016 haveto all our named executive officers with a three-year performance period. The number of shares issued at vesting will be determined bybased on the company’s achievement of internal revenue growth goals (60% weighting) and total shareholder return as compared to the S&P 500 Index (40% weighting), subject to attaining a threshold level of adjusted income from continuing operations over thesuch three-year period, and will range from 0% to 200% of target.
About three-quarters of the compensation we awarded to all our named executive officers was in the form of equity and about three-quarters of the aggregate equity awards granted to all our named executive officers was in the form of performance share units and stock options. Our named executive officers with a target award. annual equity incentive award received such awards in 2018 above target levels, which included performance share units.
In addition, in 2016, we entered into2018, our compensation committee approved amendments to the employment agreementAmended and key executive employmentRestated Fiserv, Inc. 2007 Omnibus Incentive Plan (the “Incentive Plan”) to, among other things, impose aone-year minimum vesting requirement for equity awards, prohibit the cash buyout of underwater stock options, and severance agreement with our chief executive officer. Underclarify that certain shares cannot bere-credited to the amendments, he will continue to serve as our president and chief executive officer for at least another three-year term followed by automatic one-year renewals, and we eliminated the excise tax gross-up provisions in his agreements.Incentive Plan reserve.
Determining and Structuring Compensation
Compensation Philosophy and Objectives
Our executive officers are critical to our long-term success; therefore, we need to be competitive with companies that require talent aligned to our product, technology and service roadmaps. We
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
seek to pay our executive officers at levels that are competitive with other employers, both within and outside of our industry, to secure the best talent possible for all our stakeholders. Consistent with Fiserv’s “pay for performance” philosophy, the compensation committee strivesseeks to set executive officerstructure compensation at a level that incentivizes our leaders to strive for market-leading performance, which we expect will translate into long-term value for our shareholders, and is comparable tobalanced by the 50th percentilerisk of lower performance-based compensation when we do not meet our peers with an opportunity for 75th percentile compensation for superior performance.performance objectives. We also seek to structure our compensation plans in a manner that is understandable to our shareholders and that is consistent with good corporate governance practices.
The goal of our executive compensation program is the same as our goal for operating our company: to create long-term value for our shareholders and clients. To this end, we design our compensation program to reward our executive officers for sustained financial, operating and operatingstrategic performance, to align their interests with those of our shareholders, and to encourage them to remain with the company for long and productive careers.
Determining Compensation
The Compensation Committee’s Role
The compensation committee of the board of directors is responsible for:
With respect to executive officers, at the beginning of each year, the compensation committee sets base salaries, approves cash incentive awards for the prior year’s performance, approves equity
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38 | 2019 Proxy Statement |
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incentive awards, and establishes the objective performance targets to be achieved for the upcoming year and, beginning in 2016, for the three-year performance period associated with performance share units.targets.
Management’s Role
Our chief executive officer makes recommendations to our compensation committee concerning the compensation of executive officers other than himself, although performance measures included in his recommendations may apply generally to all executive officers. For example, when formulating recommendations to the compensation committee regarding the compensation of a group president, our chief executive officer considers, among other factors, the group’s internal revenue growth, netadjusted operating profit,income, strategic progress, talent development, operational excellence and market data. Our chief executive officer annually completes a self-appraisal of his performance. For 2015,2018, his self-appraisal focused on strategic impact, growth, talentleadership development, risk management and financial results. The appraisal, and the recommendations of the nominating and corporate governance committee, which administers the annual evaluation of the chief executive officer by the board, is considered by the compensation committee in its annual review of our chief executive officer’s performance and compensation. Our chief executive officer does not attend the portion of any compensation committee meeting during which the committee deliberates on matters related specifically to his compensation.
Consultant’s Role
During 2015,In 2018, the compensation committee engaged Meridian Compensation Partners, LLC (“Meridian”) to advise it regarding the committee regarding non-employee director compensation and the design elementsstructure of aour performance-based equity, compensation program.including the performance metrics applicable to our performance share unit awards. In addition, Meridian provided management with market compensation data, and assistance with tally sheet calculations.calculations and advice regarding director stock ownership requirements. Management also obtained market compensation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
data from Willis Towers Watson in 20152018 pursuant to a standard data subscription. As further described herein, management used this market data to make recommendations to the committee regarding compensation matters. The committee reviewed Meridian’s work and its policies and procedures regarding ensuring independence and concluded that management’s work with Meridian did not impair Meridian’s abilitywas able to provide independent advice regarding executive compensation matters because of the de minimis revenue associated with the services that Meridian provided and Meridian’s policies and procedures ensuring independence.matters.
Tally Sheets
The compensation committee reviews executive officer compensation tally sheets each year. These summaries set forth the dollar amount of all components of each named executive officer’s compensation, including base salary, annual target cash incentive compensation, annual target equity incentive compensation, value of unvested equity, potential severance, and employer contributions to 401(k) savings plans, allowing the committee to see what an executive officer’s total compensation is and how a potential change to an element of our compensation program would affect an executive officer’s overall compensation.
Shareholder Advisory Vote on Named Executive Officer Compensation
At our 20152018 annual meeting, our shareholders approved, by approximately 97%94% of the votes cast, the compensation of our named executive officers as disclosed in our 20152018 proxy statement. The compensation committee considered the results of the 20152018 advisory vote at its meeting in February 2016.2019. Because a substantial majority of our shareholders approved the compensation program described in the proxy statement for the 20152018 annual meeting, the compensation committee did not implement changes to our executive compensation program as a result of the shareholder advisory vote. The compensation committee will continue to consider the results of shareholder advisory votes about our named executive officer compensation.
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Structuring Compensation
Components of Compensation
The elements of compensation that we provided to our named executive officers for 20152018 were base salary, annual cash incentive awards and equity incentive awards.
Type
| Elements
| Description
| ||||||||
Short-Term Compensation | Base Salary | • • • | Fixed annual amount Provides a level of income security Used to determinepay-based incentives | |||||||
| ||||||||||
Annual Cash Incentive | • | Annual cash award based on achievement of
| ||||||||
Long-Term Compensation | Stock Options and Restricted Stock Units | • | Equity grants that vest over a period of several years | |||||||
Performance Share Units | • | Equity grants where the number of shares issued at vesting will be determined by the achievement of performance goals over a multi-year period
|
Base Salary
We provide base salary to compensate an executive officer for his or her regular work. When determining base salaries, the compensation committee considers market data, an executive officer’s scope of responsibilities, the market value of their experience, overall effectiveness, and, except in the case of the base salary of our chief executive officer, the recommendations of our chief executive officer.
Cash Incentive
We believe it is important to provide annual cash incentives to motivate our executive officers to
Equity Incentive
| Stock options |
Performance share units further align the long-term interests of
When making equity award decisions, we do not consider existing equity ownership because we do not want to discourage executive officers from holding significant amounts of our common stock. We also do not review realized compensation from prior equity awards when making current compensation decisions. If the value of equity awards granted in prior years increases significantly in future years, we do not believe that this positive development should impact current compensation decisions. |
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Mix of Compensation Components
We believe that the mix of compensation that we pay helps us to achieve our compensation objectives.
Components | Objectives | |||
Fixed and variable compensation | We seek to increase the percentage of total pay that is “at risk” as executive officers move to greater levels of responsibility, with direct impact on company results. | |||
Short-term and long-term focus | We seek to create incentives to achieve near-term goals by providing annual cash incentives, which are based on annual performance | |||
Cash and equity compensation | We believe that executive officers in positions that more directly affect corporate performance should have as their main priority profitably growing the company. Accordingly, we generally structure the target compensation of these executive officers so that they receive a significant portion of their compensation in the form of equity. Using equity in this manner further aligns executive officers’ interests with those of our shareholders, encourages retention and rewards our executive officers if we succeed. |
Peer Group
In setting compensation levels for our executive officers, the committee considers, among other things, the compensation of similarly situated executives at companies in our peer group. To determine peer group compensation for an executive officer, the committee reviewed publicly available proxy and survey data regarding comparable executive officer positions and the compensation paid to our other executive officers in light of their relative functional responsibilities and experience. Notwithstanding the use of benchmarking as a tool to set compensation, comparison data only provides a context for the decisions that the compensation committee makes. The committee may also consider, among other matters, market trends in executive compensation, the percentage that each component of compensation comprises of an executive officer’s total compensation and the executive officer’s tenure in position.
After a comprehensive review, the committee updated the peer group that it considered in determining 2018 compensation to reflect changes in our industry, our businesses and at peer group companies. The compensation committee-approved peer group that we used for 2015 and that the committee approved2018 compensation is set forth below:
Alliance Data Systems Corporation
| First Data Corporation | PayPal Holdings, Inc. | ||
Automatic Data Processing, Inc.
|
| Total System Services, Inc. | ||
Broadridge Financial Solutions, Inc. | Intuit Inc. | Unisys Corporation | ||
Discover Financial Services
|
Jack Henry & Associates, Inc.
| Visa Inc. | ||
Equifax Inc. | MasterCard Incorporated
| The Western Union Company
| ||
Fidelity National Information Services, Inc. | Paychex, Inc.
| Worldpay, Inc.
|
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We believe our peer group is comprised of companies comparable to ours based on our industry, company size and competition for managerial talent. In this regard, we include: companies that compete with us for managerial talent; companies that directly compete with us in our primary businesses; companies with similar business models in similar industries because they reflect the complexities inherent in managing an organization with multiple business lines and revenue sources; and other publicly tradedbusiness-to-business, service-based companies that are of similar size based primarily on annual revenue and market capitalization.
20152018 Named Executive Officer Compensation
Base Salaries
In 2015, we increased the base salaries of Messrs. Ernst and Gregoire to recognize their current scope of responsibilities and to better align their base salaryThe compensation with those holding comparable positions at peer companies. Wecommittee did not increase the base salaries of our otherany named executive officers in 2015. We have2018. It has not increased the base salary of our chief executive officer in the last ten years.since he joined our company.
Cash Incentive Awards
Certain Terminology
In this section of the proxy statement, we use a number of financial terms. Adjusted earnings per share, internal revenue growth and consolidated netadjusted operating profitincome arenon-GAAP financial measures. See Appendix A to this proxy statement for a definition of these measures.
Messrs. Yabuki and HirschHau
The cash incentive payments to Messrs. Yabuki and HirschHau for 20152018 were based 80% on adjusted earnings per sharefinancial metrics and internal revenue growth. We use20% on the committee’s assessment of the executive officer’s progress with respect to strategic initiatives including employee engagement and client initiatives. With respect to financial metrics, the committee uses adjusted earnings per share as a performance measure because we believeit believes that there is a direct correlation between thean increase in adjusted earnings per share and shareholder value. We useThe committee uses internal revenue growth because we believeit believes that the long-term value of our enterprise depends on our ability to grow revenue without regard to acquisitions. For 2015, we2018, the committee set the target adjusted earnings per share performance goal at $3.78,$3.05, which represented a 12%23% increase over our 20142017 adjusted earnings per share. For 2015,2018, we set the target internal revenue growth performance goal at 4.6%4.2% compared to internal revenue growth of 4.3%3.7% in 2014.2017. For 2015,2018, the committee gave each financial measure equal weight in determining the final award. With respect to the 20% of the award based on strategic initiatives, the committee considered a number of factors and determined the level of achievement in its judgment.
The threshold, target, maximum and actual amounts for Messrs. Yabuki and HirschHau for 2018 were as follows:
Performance Measure(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Objective(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted Earnings Per Share (60%) | $3.63 | $3.78 | $4.01 or more | $3.87 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted Earnings Per Share (40%)
|
|
$2.98
|
|
|
$3.05
|
|
| $3.33 or more
|
|
| $3.10
|
| ||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Internal Revenue Growth (40%) | 2.1% | 4.6% | 7.1% or more | 4.3% |
|
2.0%
|
|
|
4.2%
|
|
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6.7% or more
|
|
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4.5%
|
| ||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Strategic Initiatives (20%)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Award as a Percentage of Base Salary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
J. Yabuki | 75% | 150% | 300% | 158% |
|
88%
|
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175%
|
|
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350%
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|
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173%
|
| ||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
T. Hirsch | 55% | 110% | 220% | 116% | ||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Hau |
|
55%
|
|
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110%
|
|
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220%
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|
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110%
|
| ||||||||||||||||||||||||||||||||||||||||||||
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Mr. ErnstVielehr and Ms. McCreary
The cash incentive payment to each of Mr. ErnstVielehr and Ms. McCreary for 20152018 was basedweighted 70% on achievement of financial metrics and 30% on the committee’s assessment of his or her progress with respect to strategic initiatives including employee engagement and client initiatives. In addition to adjusted earnings per share and internal revenue growth, the committee considers adjusted operating income as both a key performance objective and consolidated net operating profit. Similar to other named executive officers, these company-widea primary indicator of free cash flow growth. The compensation committee uses common corporate financial performance measures are designed to drive internal revenue growthensure alignment across its functional leaders. With respect to the 30% of the award based on strategic initiatives, the committee considered a number of factors and profitability. In addition, we used consolidated net operating profit because we believe Mr. Ernst hasdetermined the ability to drive high quality revenue growth and effectively manage our costs through operational effectiveness programs. level of achievement in its judgment.
For 2015,2018, the threshold, target, maximum and actual amounts for Mr. ErnstVielehr were as follows:
Performance Measure(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||
|
|
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|
|
|
|
|
| ||||||||||||||||
Adjusted Earnings Per Share (30%) | $3.63 | $3.78 | $4.01 or more | $3.87 | ||||||||||||||||||||
|
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|
|
|
|
|
|
| ||||||||||||||||
Internal Revenue Growth (40%) | 2.1% | 4.6% | 7.1% or more | 4.3% | ||||||||||||||||||||
|
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|
|
|
|
| ||||||||||||||||
Consolidated Net Operating Profit (in millions) (30%) | $1,529 | $1,579 | $1,674 | $1,604 | ||||||||||||||||||||
|
|
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|
|
|
|
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| ||||||||||||||||
Award as a Percentage of Base Salary | 68% | 135% | 270% | 137% | ||||||||||||||||||||
|
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Performance Objective(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||||||||||
|
|
|
|
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|
|
|
| ||||||||||||||||||||||||
Adjusted Earnings Per Share (10%)
|
| $2.98
|
|
| $3.05
|
|
| $3.33 or more
|
|
|
$3.10
|
| ||||||||||||||||||||
|
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|
|
| ||||||||||||||||||||||||
Internal Revenue Growth (30%)
|
| 2.0%
|
|
| 4.2%
|
|
| 6.7% or more
|
|
| 4.5%
|
| ||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Adjusted Operating Income (in millions) (30%)
|
| $1,755
|
|
| $1,805
|
|
| $1,905
|
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| $1,800
|
| ||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Strategic Initiatives (30%)
| ||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Award as a Percentage of Base Salary
|
| 58%
|
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| 115%
|
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| 230%
|
|
| 111%
|
| ||||||||||||||||||||
|
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For 2018, the threshold, target, maximum and actual amounts for Ms. McCreary were as follows:
Performance Objective(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Adjusted Earnings Per Share (10%)
|
|
$2.98
|
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|
$3.05
|
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| $3.33 or more
|
|
|
$3.10
|
| ||||||||||||||||||||
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| ||||||||||||||||||||||||
Internal Revenue Growth (35%)
|
|
2.0%
|
|
|
4.2%
|
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| 6.7% or more
|
|
|
4.5%
|
| ||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Adjusted Operating Income (in millions) (25%)
|
|
$1,755
|
|
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$1,805
|
|
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$1,905
|
|
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$1,800
|
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Strategic Initiatives (30%)
| ||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||
Award as a Percentage of Base Salary
|
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48%
|
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95%
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190%
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96%
|
| ||||||||||||||||||||
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|
Messrs. Gregoire and VielehrMr. McGranahan
The cash incentive payment to each of Messrs. Gregoire and VielehrMr. McGranahan for 20152018 was basedweighted 70% on the achievement of adjusted earnings per share, internal revenue growth, consolidated net operating profitfinancial metrics and group-level results (group net operating profit30% on the committee’s assessment of his progress with respect to strategic initiatives including employee engagement and group adjusted revenue, equally weighted). Similarclient initiatives. In addition to other named executive officers, adjusted earnings per share, internal revenue growth and consolidated netadjusted operating profit are designed to drive internal revenue growth and profitability, and Mr. Gregoire and Mr. Vielehr hadincome, the ability to significantly impact those results as the president of our Financial Institutions Group and Depository Institution Services Group, respectively. We used the group-level results because we believed they were most relevant to, and could be most directly influenced by Messrs. Gregoire and Vielehr. The adjusted earnings per share, internal revenue growth and consolidated net operating profit threshold, target and maximum goals for Messrs. Gregoire and Vielehr were set at the same levels set forth above for our other named executive officers. With respect to group net operating profit andcommittee considers group adjusted revenue wegiven Mr. McGranahan’s ability to directly impact the results of the businesses for which he is responsible. The committee set the performance goal levelsgoals for each of Mr. Gregoire and Mr. Vielehrgroup adjusted revenue such that weit believed that it would be unlikely that Mr. McGranahan would achieve the top end of the range, would be achieved, but it would be reasonably likely that the target could be achieved. With respect to the 30% of the award based on strategic initiatives, the committee considered a number of factors and determined the level of achievement in its judgment.
For 2015,2018, the threshold, target, maximum and actual resultsamounts for Mr. McGranahan were as follows:
Performance Measure(weighting)
| Threshold
| Target
| Maximum
| Actual
| ||||||||||||||||||||
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| ||||||||||||||||
Adjusted Earnings Per Share (10%) | $3.63 | $3.78 | $4.01 or more | $3.87 | ||||||||||||||||||||
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Internal Revenue Growth (35%) | 2.1% | 4.6% | 7.1% or more | 4.3% | ||||||||||||||||||||
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Consolidated Net Operating Profit (in millions) (15%) | $1,529 | $1,579 | $1,674 | $1,604 | ||||||||||||||||||||
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Group-Level Results (40%) | ||||||||||||||||||||||||
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Award as a Percentage of Base Salary | ||||||||||||||||||||||||
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K. Gregoire | 50% | 100% | 200% | 113% | ||||||||||||||||||||
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B. Vielehr | 55% | 110% | 220% | 110% | ||||||||||||||||||||
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Performance Objective(weighting)
| Threshold | Target | Maximum | Actual | ||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||
Adjusted Earnings Per Share (10%)
|
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$2.98 |
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$3.05 |
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$3.33 or more |
|
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$3.10 |
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| ||||||||||||||||||||||||
Internal Revenue Growth (10%)
|
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2.0% |
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4.2% |
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6.7% or more |
|
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4.5% |
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| ||||||||||||||||||||||||
Adjusted Operating Income (in millions) (25%)
|
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$1,755 |
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$1,805 |
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$1,905 |
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$1,800 |
| ||||||||||||||||||||
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| ||||||||||||||||||||||||
Group Adjusted Revenue (25%)
| ||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||
Strategic Initiatives (30%)
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| ||||||||||||||||||||||||
Award as a Percentage of Base Salary
|
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58% |
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115% |
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230% |
|
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103% |
| ||||||||||||||||||||
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|
The 2015 award as a percentage of base salary shown in the tables above for all named executive officers includes a reduction of the annual cash incentive payment by the committee, upon the recommendation of management, based on the company’s progress against certain corporate initiatives for 2015.
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.
Equity Incentive Awards
The committee established threshold, target and maximum values of total equity awards, expressed as a percentage of base salary, for the named executive officers. On February 18, 2015,Overview
In 2018, we granted equity awards to the named executive officers based on the level of an executive officer’s responsibilities within the company and the committee’s judgment of each executive’s performance with respect to strategic impact, building of organizational capacity, talent development, strategic impact,risk management, financial results, including adjusted earnings per share and internal revenue growth, risk management and, other than with respect to his own awards, the recommendation of our chief executive officer. The mix of options and restricted stock units granted is determined by the committee based on the expressed preferenceAbout three-quarters of the compensation we awarded to all our named executive officer which is consideredofficers was in the contextform of the committee’s overall assessment of the executive officer’s compensation. equity.
The equity mix awarded by the compensation committee to each of our named executive officers is consistent with our objective of emphasizing performance-based compensation and aligning our executive officers’ economic interests with those of our shareholders. The mix of options and restricted stock units granted is determined by the committee based in part on the recommendation of the chief executive officer and an understanding of individual preference. The number of performance share units that would vest at target is based on the ability to drive high quality revenue growth and shareholder returns over the three-year performance period. The grant date fair value of performance share units, at target, and stock options granted to all named executive officers is about three-quarters of the aggregate value of all equity awards made to our named executive officers in 2018.
For 2015,2018 Equity Awards
In February 2018, the compensation committee increasedgranted Mr. Yabuki performance share units having a grant date fair value of approximately $2 million at the target award level, stock options having a grant date fair value of approximately $4 million and maximum equity awards available to Messrs. Hirsch, Ernst and Gregoire to provide them with equity opportunities that are better aligned with the equity compensation available to individuals holding similar positions at our peer companies.restricted stock units having a grant date fair value of approximately $4 million. The committee considered Mr. Yabuki’s performance with respect to strategic impact, building of organizational capacity, leadership development, risk management and Mr. Vielehr’sfinancial results, including adjusted earnings per share and internal revenue growth, in connection with his award.
In February 2018, the compensation committee set threshold, target and maximum annual equity awards were setfor Messrs. Hau, McGranahan and Vielehr and Ms. McCreary at levels commensurate with their experience and responsibilities and comparable to the equity compensation available to individuals holding similar positions at our peer companies. The grant date fair value of the annual equity incentive awards – performance share units at target, restricted stock units and options combined,– as a percentage of base salary were as follows:
Percent of Base Salary (%) | ||||||||||||||||||||||||
|
| |||||||||||||||||||||||
Annual Equity Incentive Awards
| Threshold
| Target
| Maximum
| Actual Award
| ||||||||||||||||||||
|
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|
|
| ||||||||||||||||
J. Yabuki | 238% | 476% | 952% | 778% | ||||||||||||||||||||
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| ||||||||||||||||
T. Hirsch | 100% | 275% | 400% | 340% | ||||||||||||||||||||
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| ||||||||||||||||
M. Ernst | 100% | 275% | 400% | 300% | ||||||||||||||||||||
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| ||||||||||||||||
K. Gregoire | 75% | 150% | 250% | 144% | ||||||||||||||||||||
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B. Vielehr | 100% | 200% | 300% | 277% | ||||||||||||||||||||
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Percent of Base Salary (%) | ||||||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
Threshold
|
Target
|
Maximum
|
Actual Award(1)
| |||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||
R. Hau
|
|
100%
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320%
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480%
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452%
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| ||||||||||||||||||||
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| ||||||||||||||||||||||||
L. McCreary
|
| 75%
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| 133%
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| 200%
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| 180%
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|
|
|
|
|
|
| ||||||||||||||||||||||||
D. McGranahan
|
| 100%
|
|
| 196%
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| 400%
|
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| 398%
|
| ||||||||||||||||||||
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|
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| ||||||||||||||||||||||||
B. Vielehr
|
| 100%
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|
| 200%
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| 400%
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| 398%
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| ||||||||||||||||||||
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|
(1) | The actual awards expressed as a percentage of base salary include the grant date fair value of the performance share units granted in February 2018 at the target award level. |
Each of Messrs. McGranahan and Vielehr also received a performance share unit award with a grant date fair value of approximately $1.1 million and $2.2 million at target, respectively, in connection with their respective promotions to Senior Group President and Chief Administrative Officer. These performance share units have the same performance period and performance measures as the annual performance share unit awards made earlier in 2018. In addition, as a result of their promotions, the target annual equity award going forward for each of Messrs. McGranahan and Vielehr was increased to 294% of base salary.
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.
2018 Performance Share Units
For performance share units granted in 2018, 60% of the shares subject to the award will be issuable based on a three-year cumulative annual internal revenue growth rate, and 40% of the shares will be issuable based on our company’s total shareholder return over the three-year period as reported on the Nasdaq Global Select Market compared to the total shareholder return of the S&P 500 Index over the same period. The performance multipliers to be applied to the target number of shares issuable pursuant to each named executive officer’s award at the threshold, target and maximum achievement levels are as follows:
Internal Revenue Growth (60% Weighting) | Total Shareholder Return (40% Weighting) | |||||||||||||||||||||||||||||
|
Three-Year Cumulative
| Performance Multiplier
| Three-Year Company TSR v. S&P
| Performance Multiplier
| ||||||||||||||||||||||||||
Maximum
|
| 5.5% or greater
|
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| 200%
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| +45 or greater
|
| 200%
|
| ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Target
|
| 4.0%
|
|
| 100%
|
| +/- 5
|
| 100%
|
| ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||
Threshold
|
| 3.0%
|
|
| 25%
|
| -25
|
| 50%
|
| ||||||||||||||||||||
|
|
|
|
|
|
|
|
The three-year cumulative annual internal revenue growth rate will be calculated using the actual annual internal revenue growth rates for each of the three years in the performance period, and the company’s total shareholder return relative to the S&P 500 will be calculated as the absolute difference between the two total shareholder return values over the three-year performance period. The performance share units are also subject to attaining a threshold level of adjusted income from continuing operations for the three-year period which, if not met, will result in no performance share units vesting. All named executive officers received a grant of performance share units in 2018.
The compensation committee uses adjusted income from continuing operations as the threshold performance measure because it believes there should be a minimum level of income generated before long-term, performance-based awards pay out. The committee focuses on internal revenue growth as a performance measure to determine 60% of the level of vesting because it believes that the long-term value of our enterprise is linked to our ability to grow revenue without regard to acquisitions, and it uses company total shareholder return on an absolute basis to determine 40% of the level of vesting because it believes that this metric further aligns ourpay-for-performance philosophy with the creation of shareholder value.
2016 Performance Share Units
In 2016, the compensation committee granted 2,070 and 12,416 performance share units at target to each of Ms. McCreary and Mr. Vielehr, respectively, as part of their annual equity awards and 236,012 performance share units at target to Mr. Yabuki in connection with the renewal of his employment agreement. The vesting of the performance share units was subject to multiple criteria including the achievement of a threshold cumulative adjusted income from continuing operations goal of $2.5 billion, and a three-year cumulative annual internal revenue growth rate. In the case of Mr. Yabuki, in addition to the internal revenue growth rate (weighted 80%), there was a talent development goal (weighted 20%) to be determined by the committee in its discretion.
In February 2019, the compensation committee certified achievement of the threshold cumulative adjusted income from continuing operations goal, but the company’s 3.9% cumulative annual internal revenue growth rate for the three-year period was below the threshold level of 4.0%. Accordingly, none of the performance share units granted to Ms. McCreary and Mr. Vielehr vested, and the 188,809 performance share units granted to Mr. Yabuki at target for financial performance also did not vest. With respect to the portion of Mr. Yabuki’s award subject to a talent development goal, the committee determined that Mr. Yabuki exceeded the target for attracting, developing and motivating engaged management-level employees and creating a succession plan for his position, and the committee certified a performance multiplier of 200% for that portion of his award resulting in the vesting of 94,405 performance share units.
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45 | 2019 Proxy Statement |
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Other Elements of Compensation
Employee Stock Purchase Plan
We maintain atax-qualified employee stock purchase plan that is generally available to all employees, including executive officers, which allows employees to acquire our common stock at a discounted price on anafter-tax basis. This plan allows employees to buy our common stock at a 15% discount to the market price with up to 10% of their salary and incentives (up to a maximum of $25,000 in any calendar year), with the objective of allowing employees to benefit when the value of our stock increases over time.
Post-Employment Benefits
We provide severance andchange-in-control protections to our named executive officers through key executive employment and severance agreements and, in the case of Messrs. Yabuki, Ernst, Gregoire and Vielehr, employment agreements. We discuss the purposes and terms of the agreementswhich are discussed below under the heading “Employment“Employment and Other Agreements with Executive Officers.Officers.”
Perquisites
In 2015, we didWe generally do not provide anysignificant personal-benefit perquisites to our named executive officers other than relocation-related expenses disclosedofficers. More information regarding perquisites can be found in footnote 4 to the Summary Compensation Table below and participation in an executive physical program.below.
Retirement Savings Plan and Health and Welfare Benefits
We provide subsidized health and welfare benefits which include medical, dental, life insurance, disability insurance and paid time off.off on the same terms generally available to all salaried employees. Executive officers are entitled to participate in our health, welfare and 401(k) savings plans on generally the same terms and conditions as other employees, subject to limitations under applicable law. We subsidize supplemental long-term disability coverage for executive officers. We do not provide a separate pension program or a supplemental executive retirement plan. Our employees, including executive officers, are immediately
eligible for matching contributions under our 401(k) savings plan. Our matching contributions are capped at 3% of annual cash compensation and vest after two years.
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Non-Qualified Deferred Compensation Plan
Our named executive officers, along with other highly compensated employees, are eligible to participate in anon-qualified deferred compensation plan pursuant to which they can defer up to 75% of base salary, commissions and/or any cash payment earned pursuant to one of our written incentive plans. We do not make any contributions to this plan.
Participants wishing to participate in the plan must make a deferral election each year and choose the time and form of distribution. The participant may elect to have distributions begin on a specified date or following retirement. Distributions will also occur in connection with any other separation from service, or upon death or a change in control. Accounts are credited with earnings based on each participant’s selection among investment choices that are similar to those available under our 401(k) plan. Investment allocations may be changed at any time by the participant.
Additional Compensation Policies
Securities Trading Policy
We prohibit our executive officers from trading in our common stock during certain periods at the end of each quarter until after we disclose our financial and operating results unless such trading occurs under an approved Rule10b5-1 plan. We may impose additional restricted trading periods at any time if we believe trading by executive officers would not be appropriate because of developments that are, or could be, material. In addition, we requirepre-clearance by our chief legal officer and our chief executive officer of all stock transactions by designated senior members of management and our board of directors, including the establishment of a Rule10b5-1 trading plan.
We also prohibit our employees, officers and directors from hedging or engaging in short sales of our stock. Furthermore, directors and executive officers are prohibited from pledging our stock and from entering into transactions in derivative instruments in connection with our stock.
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46 | 2019 Proxy Statement |
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Stock Ownership
We believe that stock ownership by our executive officers is essential for aligning management’s long-term interests with those of our shareholders. To emphasize this principle, we maintain a stock ownership policy that requires our chief executive officer to own equity having a value of at least six times his base salary and our other executive officers to own equity having a value of at least four times their respective base salaries. We believe that these levels are sufficiently high to demonstrate a commitment to value creation, while satisfying our executive officers’ needs for portfolio diversification. All executive officers are expected to satisfy the stock ownership requirements within five years after they become subject to them with minimum attainment levels beginning at the end of the second year. All named executive officers are in compliance with thethese requirements.
Compensation Recoupment Policy
In the event that we restate our financial results, we may recover all or a portion of the incentive awards that we paid or granted, or that vested, on the basis of such results. Recovery may be sought, in the discretion of the board, from any person who was serving as an executive officer of the company at the time the original results were published. Both cash and equity incentive awards are subject to recoupment; there is no time limit on our ability to recover such amounts, other than limits imposed by law; and recoupment is available to us regardless of whether the individuals subject to recoupment are still employed by us when repayment is required. To the extent recoupment is sought, the board of directors may, in its discretion, seek to recover interest on amounts recovered and/or costs of collection, and we have the right to offset the repayment amount from any compensation owed by us to any executive officer. The independent members of our board of directors, or a committee thereof comprised solely of independent directors, are responsible for determining whether recoupment is appropriate and the specific amount, if any, to be recouped by us.
Equity Award Grant Practices
The compensation committee generally approves annual equity awards to members of the company’s
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executive committee, including all named executive officers, during its regularly-scheduled February meeting, after we issue our financial results for the prior year. The compensation committee also delegates authority to the chief executive officer and chief financial officer to approve annual equity awards to employees who are not executive officers from an equity award pool approved by the committee for this purpose. In addition, in order to accommodate the need for periodic awards, such as in connection with newly hired employees, promotions or retention awards, the compensation committee delegates its authority to our chief executive officer and chief operatingfinancial officer to enable such individualseither of them to grant equity awards within certain parameters; provided that all grants to directors and executive officers are specifically made by the compensation committee. Our equity grant policy prescribes the timing of awards or specific grant dates. Under the Incentive Plan, the exercise price of all options to purchase shares of our common stock may not be less than the closing price of our common stock on the NASDAQ stock market on the grant date.
Deductibility of Compensation
Section 162(m) of the Internal Revenue Code places a limit of $1,000,000 on the amount of compensation that we may deduct from our taxable income for federal income tax purposes in any one year with respect to our covered employees, including our named executive officers (other than our chief financial officer). Certainofficers. Pursuant to the Tax Cuts and Jobs Act of 2017 (the “Act”), performance-based compensation is not subject tono longer exempt from the deduction limit. It is generally our intentionlimit, except that, under the Act, certain performance-based compensation paid pursuant to written binding contracts in effect on November 2, 2017 and not modified thereafter may still qualify for an exception from the deduction limit and we continue to consider how and whether compensation paymentswe pay in the future could qualify for tax deductibilitythis transitional relief under Section 162(m).the Act. Notwithstanding our intentions, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m), as amended by the Act, and theany regulations to be issued thereunder, no assurance can be given that such compensation intended to satisfy the requirementstransitional relief for deductibility under Section 162(m) will so qualify. OurThe compensation committee reserves the right to providemay also establish compensation arrangements that doesotherwise may not qualify as performance-based compensationbe fully tax
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47 | 2019 Proxy Statement |
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deductible under Section 162(m) to the extentapplicable tax laws if it believes such compensation is necessary to continue to provide competitive arrangements intended to attract and retain, and provide appropriate incentives to, qualified officers and other key employees.will further the objectives of our executive compensation program.
Employment and Other Agreements with Executive Officers
Yabuki Employment Agreement
In 2016, we amended the employment agreement with Mr. Yabuki to provide that Mr. Yabuki will continue to serve as our president and chief executive officer for at least another three-year term and, subject to election by our shareholders, as a director. After the current three-year term ends in 2018,In March 2019, the agreement automatically renewsrenewed for aone-year terms term, and will continue to do so, unless either party gives the other 90 days prior written notice of his or its desire to terminate the agreement.
Under his employment agreement, as amended, in 2016, Mr. Yabuki is entitled: (i) to receive an annual salary of at least $840,000; (ii) to participate in our executive incentive compensation plan with a target and maximum cash incentive award of not less than 175% and 350% of his base salary, respectively; (iii) to receive grants of options, restricted stock and/or other awards under our long-term incentive compensation program
commensurate with his position, provided that thewith each year’s award having a grant date fair value of each year’s awards shall not be less thanat least $8 million; and (iv) to participate in our employee benefit plans, welfare benefit plans, retirement plans and other standard benefits as are generally made available to our executive officers. In addition, the 2016 amendment provides for the elimination of the excise tax gross-up provision in his existing employment agreement and for a one-time grant of performance share units. The performance share units have a grant date fair value of approximately $12 million and vest at the end of a three-year performance period only upon the achievement of specified revenue growth and talent development goals, subject to attaining a threshold level of adjusted income from continuing operations over such three-year period. In the event of a conflict between his employment agreement and the terms of an equity award agreement, his employment agreement will control unless the equity award agreement provides a more favorable benefit. The terms of Mr. Yabuki’s employment agreement and key executive employment and severance agreement, or “KEESA,” resulted from anarm’s-length negotiation, and, as a result, we believe the terms reflect the market terms for the leader of a company of our size in our industry.
Ernst, Gregoire and VielehrOther Employment Agreements
We entered into an employment agreement with each of Messrs. Ernst, GregoireHau, McGranahan and Vielehr pursuantand Ms. McCreary in connection with the start of their
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employment with us. Under Mr. Hau’s agreement, he is entitled to: (i) receive an annual salary of at least $625,000; (ii) participate in our annual cash incentive plan with a target and maximum award of 110% and 220% of base salary, respectively; (iii) participate in our annual equity incentive plan with an annual target of $2,000,000; (iv) asign-on equity grant of $2,500,000 of restricted stock units and $3,000,000 of stock options, each of which will vestone-half on each of the third and fourth anniversaries of grant; (v) aone-time cash award of $500,000 which was paid in full in 2016; and (vi) reimbursement of relocation expenses.
Under his agreement, Mr. McGranahan is entitled to: (i) receive an annual salary of at least $510,000; (ii) participate in our annual cash incentive plan with a target and maximum award of 115% and 230% of base salary, respectively; (iii) participate in our annual equity incentive plan with an annual target of $1,000,000; (iv) asign-on equity grant of $1,000,000 of restricted stock units and $2,200,000 of stock options, each of which will vestone-half on each of the third and fourth anniversaries of grant; (v) aone-time cash award of $500,000 which was paid in full in 2017; (vi) an additional equity award of $3,000,000 in February 2020, subject to his continued full-time employment in good standing, which wewill vest in equal installments on the third and fourth anniversaries of grant; and (vii) reimbursement of relocation expenses.
We agreed to employ themeach of Ms. McCreary and Mr. Vielehr under their respective employment agreements until one party provides the other with a notice of termination. Under their employment agreements, Messrs. Ernsteach of Ms. McCreary and Mr. Vielehr are entitled:is entitled to: (i) to receive an annual salary of at least $525,000$350,000 and $470,000, respectively; (ii) to participate in our executive cash incentive compensation plan; and (iii) to participate in our executive long-term equity incentive compensation program with an annual target of at least $300,000 and 200% of base salary; and (iv) in the case of Mr. Vielehr, a one-time cash payment of $200,000 which was paid on March 15, 2014. Under his employment agreement, Mr. Gregoire is entitled: (i) to receive an annual salary, of at least $400,000; (ii) to participate in our executive incentive compensation plan; and (iii) to participate in our executive long-term compensation program. respectively.
In addition, Messrs. Ernst, GregoireHau, McGranahan and Vielehr and Ms. McCreary are entitled to participate in our employee benefit plans, welfare benefit plans,
retirement plans and other standard benefits as are generally made available to our executive officers. The terms of Mr. Ernst’s, Mr. Gregoire’s and Mr. Vielehr’s employmenteach of their agreements and KEESAs resulted fromarm’s-length negotiations, and, as a
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.
48 | 2019 Proxy Statement |
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result, we believe the terms reflect the market terms for a leader of a company of our size in our industry.
Key Executive Employment and Severance Agreements
We have entered into KEESAs, with our executive officers that provide for potential benefits in connection with a change in control. The closing of the proposed acquisition of First Data will not constitute a change in control under the KEESAs. A complete discussion of the terms of the KEESAs, together with an estimate of the amounts potentially payable under each KEESA, appears below under the heading “Potential Payments Upon Termination or Change in Control.”
The compensation committee has reviewed and discussed the “Compensation Discussion and Analysis” contained in this proxy statement with management. Based on our review and the discussions with management, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form10-K for the year ended December 31, 2015.2018.
Glenn M. Renwick,Doyle R. Simons, Chairman
Harry F. DiSimone
Dennis F. Lynch
Doyle R. SimonsKim M. Robak
Compensation Committee Interlocks and Insider Participation
During the last fiscal year, there were no compensation committee interlocks between us and other entities involving our executive officers and directors who serve as executive officers or directors of such other entities. During the last completed fiscal year, no member of the compensation committee was a current or former officer or employee.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
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The following table sets forth in summary form the compensation of our chief executive officer, our chief financial officer and our next three highest paid executive officers (collectively, our “named executive officers”) for the year ended December 31, 2015.2018.
Name and Principal Position
| Year
| Salary
| Bonus
| Stock Awards(1)
| Option Awards(1)(2)
| Non-Equity Incentive Plan Compensation(3)
| All Other Compensation(4)
| Total
| ||||||||||||||||||||||||||||||||||||||||
Jeffery W. Yabuki | 2015 | $ | 840,000 | — | $ | 1,288,041 | $ | 6,535,501 | $ | 1,328,040 | $ | 9,737 | $ | 10,001,319 | ||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
President and Chief | 2014 | 840,000 | — | 1,078,613 | 4,722,371 | 1,622,880 | 12,053 | 8,275,917 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Executive Officer | 2013 | 840,000 | — | 916,074 | 4,400,022 | 1,359,036 | 11,965 | 7,527,097 | ||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||
Thomas J. Hirsch(5) | 2015 | 500,000 | — | 850,025 | 1,001,972 | 579,700 | 11,348 | 2,943,045 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Former Chief Financial | 2014 | 500,000 | — | 650,028 | 650,004 | 644,000 | 12,427 | 2,456,459 | ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||
Officer, Treasurer and | 2013 | 475,000 | — | 650,039 | 650,008 | 461,102 | 12,109 | 2,248,258 | ||||||||||||||||||||||||||||||||||||||||
Assistant Secretary | ||||||||||||||||||||||||||||||||||||||||||||||||
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Mark A. Ernst | 2015 | 600,000 | — | — | 1,972,804 | 824,823 | 11,267 | 3,408,894 | ||||||||||||||||||||||||||||||||||||||||
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Chief Operating Officer | 2014 | 575,000 | — | — | 1,400,005 | 886,291 | 11,923 | 2,873,219 | ||||||||||||||||||||||||||||||||||||||||
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2013 | 575,000 | — | 350,033 | 1,050,003 | 715,515 | 11,985 | 2,702,536 | |||||||||||||||||||||||||||||||||||||||||
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Kevin P. Gregoire | 2015 | 450,000 | — | 325,054 | 328,121 | 510,300 | 11,053 | 1,624,528 | ||||||||||||||||||||||||||||||||||||||||
Group President, | ||||||||||||||||||||||||||||||||||||||||||||||||
Financial Institutions Group | ||||||||||||||||||||||||||||||||||||||||||||||||
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Byron C. Vielehr(6) | 2015 | 470,000 | — | — | 1,309,042 | 515,924 | 24,914 | 2,319,880 | ||||||||||||||||||||||||||||||||||||||||
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Group President, | 2014 | 470,000 | $ | 200,000 | — | — | 645,900 | 313,257 | 1,629,157 | |||||||||||||||||||||||||||||||||||||||
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Depository Institution | 2013 | 39,167 | — | 2,000,290 | 2,000,186 | — | 13,245 | 4,052,888 | ||||||||||||||||||||||||||||||||||||||||
Services Group | ||||||||||||||||||||||||||||||||||||||||||||||||
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Name and | Year | Salary
| Bonus | Stock Awards(1)(2) | Option Awards(1) | Non-Equity Incentive Plan Compensation(3) | All Other Compensation(4) | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffery W. Yabuki | 2018 | $ | 840,000 | — | $6,112,010 | $4,000,013 | $1,451,596 | $ 7,150 | $ | 12,410,769 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||
President and Chief | 2017 | 840,000 | — | 4,525,256 | 3,474,815 | 1,569,431 | 7,860 | 10,417,362 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Executive Officer
| 2016
|
| 840,000
|
|
| —
|
|
| 14,680,135
|
|
| 4,320,031
|
|
| 1,389,679
|
|
| 11,937
|
|
| 21,241,782
|
| ||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||
Robert W. Hau(5) |
2018 |
|
625,000 |
|
|
— |
|
|
1,678,043 |
|
|
1,150,016 |
|
|
684,462 |
|
|
131,520 |
|
|
4,269,041 |
| ||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2017 | 625,000 | — | 1,500,148 | 800,023 | 749,788 | 83,139 | 3,758,098 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||
and Treasurer
| 2016
|
| 499,599
|
| $
| 500,000
|
|
| 2,500,008
|
|
| 3,000,004
|
|
| 649,935
|
|
| 151,244
|
|
| 7,300,790
|
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| |||||||||||||||||||||||||||||||||||||||||||||||
Lynn S. McCreary |
2018 |
|
450,000 |
|
|
— |
|
|
511,343 |
|
|
300,026 |
|
|
434,219 |
|
|
8,250 |
|
|
1,703,838 |
| ||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Chief Legal Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
and Secretary
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||
Devin B. McGranahan(5) |
2018 |
|
510,000 |
|
|
— |
|
|
1,615,684 |
|
|
1,500,038 |
|
|
523,538 |
|
|
74,196 |
|
|
4,223,456 |
| ||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||
Senior Group President | 2017 | 510,000 | 500,000 | 500,011 | 400,012 | 524,285 | 84,992 | 2,519,300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
| ||||||||||||||||||||||||||||||||||||||||||||||||
2016
|
| 86,961
|
|
| —
|
|
| 1,000,064
|
|
| 2,200,009
|
|
| 179,339
|
|
| 11,508
|
|
| 3,477,881
|
| |||||||||||||||||||||||||||||||||||||||||
|
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|
|
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|
|
| |||||||||||||||||||||||||||||||||||||||||||||||
Byron C. Vielehr(6) |
2018 |
|
510,000 |
|
|
— |
|
|
2,703,383 |
|
|
1,500,038 |
|
|
567,561 |
|
|
8,250 |
|
|
5,289,232 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Chief Administrative | 2017 | 500,000 | — | 1,000,022 | 500,005 | 472,954 | 8,916 | 2,481,897 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Officer
| 2016
|
| 470,000
|
|
| —
|
|
| 1,200,006
|
|
| 600,001
|
|
| 396,482
|
|
| 11,664
|
|
| 2,678,153
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects the grant date fair value of the awards granted in the respective years under the Amended and Restated Fiserv, Inc. 2007 Omnibus Incentive
(2) The amounts shown in this column include the
| If the highest level of performance conditions is met, the grant date fair value of these awards would be as follows: Mr. Yabuki - $4,223,266; Mr. Hau - $1,055,816; Ms. McCreary - $422,386; Mr. McGranahan - $3,231,368; and Mr. Vielehr - $5,406,766. (3) These cash incentive payments were made pursuant to the Incentive Plan. These awards were earned in the year listed and paid in the following year.
(4) The amounts shown in this column include company matching contributions under our 401(k) savings
|
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Messrs. Hau and McGranahan joined Fiserv on |
(6) | Mr. Vielehr’s annualized base salary increased from $470,000 to $510,000 in April 2017. The amount shown for him reflects the actual amount of base salary paid to him during 2017. |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
The material terms of the company’s agreements with Messrs. Yabuki, Ernst, GregoireHau, McGranahan and Vielehr and Ms. McCreary are set forth above under the heading “Compensation Discussion and Analysis – Employment and Other Agreements with Executive Officers.” Mr. Hirsch did not have an employment agreement with the company.
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Grants of Plan-Based Awards in 20152018
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
| All Other Stock Awards: Number of Shares of Stock or | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Grant Date
| Threshold ($)
| Target ($)
| Maximum ($)
| Units (#)(1)
| Options (#)(1)
| ($/Sh)
| Awards ($)(2)
| Grant Date
|
Estimated Future Payouts Under Awards(1)
| Estimated Future Payouts Under Equity Incentive Plan Awards(1)(2)
| All Other Stock Awards: Number of Shares of Stock or Units (#)(1)(3)
| All Other Option Awards: Number of Securities Underlying Options (#)(1)(4)
| Exercise or Base Price of Option Awards ($/Sh)(1)
| Grant Date Fair Value of Stock and Option Awards ($)(5)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Threshold ($)
| Target ($)
| Maximum ($)
| Threshold (#)
| Target (#)
| Maximum (#)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Yabuki | 630,000 | 1,260,000 | 2,520,000 | 739,200 | 1,470,000 | 2,940,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
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|
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|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 16,294 | 1,288,041 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| 02/21/2018 | 57,230 | 4,000,377 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 206,496 | 79.05 | 5,249,645 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1,285,856(3) |
|
02/21/2018 |
| 178,572 | 69.90 | 4,000,013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. Hirsch | 275,000 | 550,000 | 1,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 7,154 | 28,616 | 57,232 | 2,111,633 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Hau | 343,750 | 687,500 | 1,375,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 10,753 | 850,025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| 02/21/2018 | 16,454 | 1,150,135 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 33,438 | 79.05 | 850,078 |
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
151,894(3) |
|
02/21/2018 |
| 51,340 | 69.90 | 1,150,016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. Ernst | 408,000 | 810,000 | 1,620,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 1,789 | 7,154 | 14,308 |
|
527,908 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
L. McCreary | 216,000 | 427,500 | 855,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 70,810 | 79.05 | 1,800,167 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
02/21/2018 |
| 4,294 |
|
300,151 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
172,637(3) |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. Gregoire | 225,000 | 450,000 | 900,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 13,394 | 69.90 |
|
300,026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 716 | 2,862 | 5,724 |
|
211,193 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. McGranahan | 295,800 | 587,000 | 1,174,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 66,966 | 69.90 |
|
1,500,038 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 4,112 | 325,054 |
|
02/21/2018 |
| 1,789 | 7,154 | 14,308 |
|
527,908 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 12,785 | 79.05 | 325,027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
03/29/2018 |
| 3,506 | 14,024 | 28,048 |
|
1,087,776 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3,094(3) |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. Vielehr | 258,500 | 517,000 | 1,034,000 | 295,800 | 587,000 | 1,174,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02/18/2015 | 51,141 | 79.05 | 1,300,132 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
02/21/2018 |
| 66,966 | 69.90 |
|
1,500,038 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8,910(3) |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/21/2018 |
| 1,789 | 7,154 | 14,308 |
|
527,908 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
03/29/2018 |
|
|
7,012 |
|
|
28,047 |
|
|
56,094 |
|
|
2,175,475 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
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|
|
|
|
|
|
(1) We (2) The performance share units reported above have a three-year performance period. The number of shares issued at vesting will be determined as described above under “Compensation Discussion and Analysis – 2018 Named Executive Officer Compensation – Equity Incentive Awards – 2018 Performance Share Units,” and will range from 0% to 200% of the target award. (3) One-third of the restricted stock units reported above vest on each of the second, third and fourth anniversaries of the grant | (4) One-third of the stock options reported above vest on each anniversary of the grant date. The options have an exercise price equal to the closing price of our common stock on the grant date and expire on the 10 year anniversary of the grant date.
|
(5) The amounts in the table represent the grant date fair value of the
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Outstanding Equity Awards at December 31, 20152018
Option Awards(1)
| Stock Awards(1)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards(1)
| Stock Awards(1)
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Number of Securities Underlying Unexercised Options Exercisable (#)
| Number of Securities Underlying Unexercised Options Unexercisable (#)
| Option Exercise Price ($)
| Option Expiration Date
| Number of Shares or Units of Stock that Have Not Vested (#)
| Market Value of Shares or Units of Stock that Have Not Vested ($)(2)
| Number of
| Number of
| Option
| Option
| Number of
| Market
| Equity
| Equity Awards:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
J. Yabuki | 75,471(3) | 6,902,578 | 184,584(4) | 13,565,078 | 57,232(5) | 4,205,980 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 206,496(4) | 79.05 | 02/18/2025 |
|
— |
|
|
178,572(6) |
|
|
69.90 |
|
|
02/21/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
83,856 | 167,714(5) | 56.97 | 02/19/2024 |
|
62,272 |
|
|
124,546(7) |
|
|
56.91 |
|
|
02/22/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
200,446 | 116,742(6) | 40.35 | 02/20/2023 |
|
183,850 |
|
|
91,926(8) |
|
|
48.33 |
|
|
02/19/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
241,350 | — | 32.64 | 02/22/2022 |
|
412,992 |
|
|
— |
|
|
39.53 |
|
|
02/18/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
329,190 | — | 30.86 | 02/23/2021 |
|
503,140 |
|
|
— |
|
|
28.49 |
|
|
02/19/2024 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
388,826 | — | 23.85 | 02/24/2020 |
|
634,376 |
|
|
— |
|
|
20.18 |
|
|
02/20/2023 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
543,984 | — | 16.37 | 02/26/2019 |
|
482,700 |
|
|
— |
|
|
16.32 |
|
|
02/22/2022 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
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|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
51,652 | — | 27.11 | 02/27/2018 |
|
658,380 |
|
|
— |
|
|
15.43 |
|
|
02/23/2021 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
190,548 | — | 27.11 | 02/27/2018 |
|
502,652 |
|
|
— |
|
|
11.93 |
|
|
02/24/2020 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
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|
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|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
248,784 | — | 27.35 | 02/23/2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T. Hirsch | 39,035(7) | 3,570,141 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Hau |
|
81,320(9) |
|
|
5,976,207 |
|
|
38,912(5) |
|
|
2,859,643 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 33,438(4) | 79.05 | 02/18/2025 |
|
— |
|
|
51,340(6) |
|
|
69.90 |
|
|
02/21/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11,542 | 23,085(5) | 56.97 | 02/19/2024 |
|
14,336 |
|
|
28,676(7) |
|
|
56.91 |
|
|
02/22/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
34,492 | 17,246(6) | 40.35 | 02/20/2023 |
|
— |
|
|
188,088(10) |
|
|
49.21 |
|
|
03/14/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
55,696 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
74,068 | — | 30.86 | 02/23/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
M. Ernst | 9,104(8) | 832,652 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 70,810(4) | 79.05 | 02/18/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24,860 | 49,721(5) | 56.97 | 02/19/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
55,716 | 27,860(6) | 40.35 | 02/20/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
90,506 | — | 32.64 | 02/22/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
97,290 | — | 29.75 | 01/03/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
K. Gregoire | 27,241(9) | 2,491,462 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
L. McCreary |
|
16,432(11) |
|
|
1,207,588 |
|
|
12,756(5) |
|
|
937,438 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 12,785(4) | 79.05 | 02/18/2025 |
|
— |
|
|
13,394(6) |
|
|
69.90 |
|
|
02/21/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2,663 | 5,328(5) | 56.97 | 02/19/2024 |
|
4,928 |
|
|
9,858(7) |
|
|
56.91 |
|
|
02/22/2027
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,632 | 3,318(6) | 40.35 | 02/20/2023 |
|
12,768 |
|
|
6,384(8)
|
|
|
48.33 |
|
|
02/19/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11,604 | — | 32.64 | 02/22/2022 |
|
29,504 |
|
|
— |
|
|
39.53 |
|
|
02/18/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| �� |
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,584 | — | 30.86 | 02/23/2021 |
|
21,310 |
|
|
— |
|
|
28.49 |
|
|
02/19/2024 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2,408 | — | 23.85 | 02/24/2020 | �� |
|
17,512 |
|
|
— |
|
|
20.18 |
|
|
02/20/2023 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5,202 | — | 27.11 | 02/27/2018 |
|
19,496 |
|
|
— |
|
|
16.32 |
|
|
02/22/2022 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
17,560 |
|
|
— |
|
|
15.43 |
|
|
02/23/2021 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
18,000 |
|
|
— |
|
|
12.68 |
|
|
03/15/2020 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. McGranahan |
|
20,310(12) |
|
|
1,492,582 |
|
|
59,928(5) |
|
|
4,404,109 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
66,966(6) |
|
|
69.90 |
|
|
02/21/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
7,168 |
|
|
14,338(7) |
|
|
56.91 |
|
|
02/22/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
137,802(13) |
|
|
49.24 |
|
|
10/31/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. Vielehr | 36,402(10) | 3,329,327 |
|
17,064(14) |
|
|
1,254,033 |
|
|
87,974(5) |
|
|
6,465,209 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 51,141(4) | 79.05 | 02/18/2025 |
|
— |
|
|
66,966(6) |
|
|
69.90 |
|
|
02/21/2028 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
38,964 | 77,928(11) | 54.95 | 12/01/2023 |
|
8,960 |
|
|
17,922(7) |
|
|
56.91 |
|
|
02/22/2027 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
25,534 |
|
|
12,768(8) |
|
|
48.33 |
|
|
02/19/2026 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
102,282 |
|
|
— |
|
|
39.53 |
|
|
02/18/2025 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
233,784 |
|
|
— |
|
|
27.48 |
|
|
12/01/2023 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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.
(1) | In each of December 2013 and March 2018, we completed atwo-for-one split of our common stock. Accordingly, all amounts are presented on a split-adjusted |
(2) | The amounts in this column were calculated by multiplying the closing market price of our common stock on December 31, |
(3) | The performance share units granted in 2017 and 2018 have a three-year performance period ending December 31, 2019 and 2020, respectively, and are subject to a threshold level of adjusted income from continuing operations which, if not met, will result in no vesting of the performance share units. The performance share units granted in 2017 and 60% of the performance share units granted in 2018 will vest based upon cumulative annual internal revenue growth over the three-year period, and the remaining 40% of the performance share units granted in 2018 will vest based upon the company’s total shareholder return over the three-year period as reported on the Nasdaq Global Select Market compared to the total shareholder return of the S&P 500 Index over the same period. The value realized by each named executive officer at the end of the three-year performance period will depend on the company’s achievement of these goals. |
(4) | Includes |
For the performance share units granted in each of 2017 and 2018, performance through December 31, 2018 exceeded the applicable target level and, in accordance with Securities and Exchange Commission rules, such units are included in this table at the maximum level as |
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
follows (2017 units; 2018 units): Yabuki ( –; 57,232); Hau (24,604; 14,308); McCreary (7,032; 5,724); McGranahan (17,572; 42,356); and Vielehr (17,572; 70,402). |
(6) | One-third of the options vest on each anniversary of the grant date, February |
One-third of the options vest on each anniversary of the grant date, February 22, 2017. |
(8) | One-third of the options vest on each anniversary of the grant date, February 19, |
Includes |
(10) | One-half of the options vest on the third and fourth anniversaries of the grant date, March 14, 2016. |
(11) | ||
Includes |
One-half of |
One-half of the options vest on the |
(14) | Includes 4,138 restricted stock units that vested on February 19, 2019 and 2,928 restricted stock units that vested on February 22, 2019. The remaining restricted stock units will vest as follows: 2,928 on February 22, 2020; 4,140 on February 19, 2020; and 2,930 on February 22, 2021. |
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Option Exercises and Stock Vested During 20152018
During our fiscal year ended December 31, 2015,2018, the named executive officers exercised options to purchase shares of our common stock and/or had restricted stock units and/or performance share units vest as set forth below. In March 2018, we completed atwo-for-one split of our common stock. Accordingly, all amounts are presented on a split-adjusted basis.
Option Awards
| Stock Awards
| Option Awards
| Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
| Number of Shares Acquired on Exercise (#)
| Value Realized on Exercise ($)(1)
| Number of Shares Acquired on Vesting (#)
| Value Realized on Vesting ($)(2)
|
Number of Shares
|
Value Realized
|
Number of Shares
|
Value Realized
| ||||||||||||||||||||||||||||||||||||||||||||||||
J. Yabuki | 740,000 | 40,011,800 | 41,864 | 3,307,144 |
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1,002,968 |
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64,317,239 |
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136,375 |
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9,932,803 |
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T. Hirsch | 296,232 | 21,630,560 | 14,538 | 1,148,499 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
R. Hau |
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— |
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— |
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— |
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— |
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M. Ernst | — | — | 6,212 | 491,059 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
L. McCreary |
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— |
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— |
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7,572 |
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540,338 |
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K. Gregoire | — | — | 4,396 | 369,553 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
D. McGranahan |
| — |
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— |
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— |
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— |
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B. Vielehr | — | — | — | — |
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— |
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— |
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4,138 |
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295,288 |
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(1)
| (2) The “Value Realized on Vesting” was calculated in accordance with
|
Non-Qualified Deferred Compensation in 2018
The following table sets forth certain information for each of our named executive officers regardingnon-qualified deferred compensation for the year ended December 31, 2018.
Name
| Executive Contributions in Last Fiscal Year ($)
| Registrant Contributions in Last Fiscal Year ($)
| Aggregate Earnings in Last Fiscal Year ($)
| Aggregate Withdrawals/ Distributions ($)
| Aggregate Balance at Last Fiscal Year End ($)
| |||||||||||||||||||||||||||||||||||
J. Yabuki
|
| —
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| —
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| —
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| —
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| —
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R. Hau
|
| —
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| —
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| —
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| —
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L. McCreary
|
| —
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| —
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| (44,240)
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| —
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| 728,744
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D. McGranahan
|
| —
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| —
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| —
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| —
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| —
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B. Vielehr
|
| —
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| —
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| —
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| —
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| —
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Please see “Compensation Discussion and Analysis – 2018 Named Executive Officer Compensation – Other Elements of Compensation –Non-Qualified Deferred Compensation Plan” above for additional information about our non-qualified deferred compensation plan.
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Potential Payments Upon Termination or Change in Control
In the discussion below, we describe potential payments to the named executive officers upon termination of employment or a change in control. The following descriptions are qualified in their entirety by reference to the relevant agreements. The complete definitions of cause, good reason, disability and change in control are set forth in the named executive officers’ employment agreements KEESAs and relevant stock option and restricted stock unit award agreements,with the company, all of which we have filed with the Securities and Exchange Commission. The closing of our proposed acquisition of First Data will not constitute a change in control under the agreements and plans described below other than with respect to the deferred compensation plan.
Terminology
“Cause” under the agreements generally refers to specified types of serious misconduct that may harm our company. In some cases, executive officers have “good reason” to terminate their employment if we change in a negative manner their working conditions or position within our organization or if we breach the terms of the agreements. “Disability” generally means physical or mental illness that causes the executive officer to become disabled to a degree as to be unable to perform substantially all of his or her duties for a continuous period of six months. The definitions may vary from agreement to agreement. Accordingly, the preceding summary description of the definitions is qualified by reference to the agreements themselves.
Employment Agreements
General
Our employment agreements with Messrs. Yabuki Ernst, Gregoire and Vielehr and Ms. McCreary provide for potential payments on certain terminations of employment. As described above under “Compensation Discussion and Analysis – Deductibility of Compensation,” these agreements are designed to comply with Section 162(m) of the Internal Revenue Code. In addition, these agreements and our KEESAs, which we describe in more detail below, all provide that post-termination payments and benefits are subject to asix-month delay in the event that the executive officer is considered a “specified employee” within the meaning of Section 409A of the Internal Revenue Code at the
time of a qualifying termination. The employment agreements also contain provisions that require
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
each of the named executive officers to maintain the confidentiality of our confidential information and proprietary data during and following his or her employment. In addition, each of Messrs. Yabuki Ernst, Gregoire and Vielehr agreesand Ms. McCreary agree that during histheir employment and for 12 months after termination of employment, hethey will not compete with us or solicit our clients or our employees. Under the employment agreements, we have the ability to recover compensation previously paid to the named executive officer if he or she breaches these obligations.
Terms of Employment Agreement with Mr. Yabuki
We have the right to terminate Mr. Yabuki’s employment at any time. Under his employment agreement, as amended in 2016, if we terminate Mr. Yabuki’s employment or fail to renew the term of his employment other than for death, disability or cause, or Mr. Yabuki terminates his employment for good reason, he is entitled to receive: (i) a lump sum payment equal to five andone-half times his current annual base salary, (ii) full vesting of all equity awards, as well as the right to exercise stock options for not less than one year following the date of termination of his employment, but in no event longer than ten years from the date of grant, or if earlier, the latest date the option could have been exercised had Mr. Yabuki remained employed, (iii) a lump sum payment equal to any cash incentive compensation that has been allocated or awarded, but not paid, to him for any period ending prior to his termination and (iv) reimbursement for COBRA or other health insurance premiums for up to two years following the date of his termination, or until Mr. Yabuki obtains health care coverage through subsequent employment, whichever is earlier.
If Mr. Yabuki’s employment is terminated for death or disability, he or his estate, as applicable, is entitled to receive full vesting of all equity and long-term awards and a lump sum payment equal to any cash incentive compensation that has been allocated or awarded, but not paid, to him for any period ending prior to his termination.
In 2016, we amended Mr. Yabuki’s employment agreement and KEESA to eliminate the excise tax gross-up provisions in his agreements.
If the benefits to Mr. Yabuki under his employment agreement are duplicative of or inconsistent with the benefits provided under his equity award agreements or KEESA, his employment agreement provides that he will receive the most favorable
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56 | 2019 Proxy Statement |
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benefits (determined on abenefit-by-benefit basis) under his equity award agreements or KEESA, on the one hand, or his employment agreement.agreement, on the other hand.
Terms of Employment Agreements with Messrs. Ernst, GregoireMs. McCreary and Mr. Vielehr
We have the right to terminate theirMs. McCreary’s and Mr. Vielehr’s employment at any time. If we terminate Mr. Ernst’sMs. McCreary’s employment other than for death, disability or cause, or if heshe terminates hisher employment for good reason, hedue to the company’s material breach of the agreement, she is entitled to receive a lump sum payment equal to 1.8 times his then-current base salary.12 months of salary plus a pro rata portion of her average annual cash incentive award payment over the prior three years. If we terminate Mr. Gregoire’s employment other than for death, disability or cause, or if he terminates his employment for good reason, he is entitled to receive a lump sum payment equal to two times his then-current base salary. With respect to Mr. Vielehr, if we terminate hisVielehr’s employment other than for death, disability or cause, he is entitled to receive: (i)receive a lump sum payment equal to 12 months of salary.
Other Agreements
We have entered into agreements with each of Messrs. Hau and McGranahan in connection with the start of their employment with us. Upon a termination without cause, each of them will receive 12 months of salary and (ii) accelerated vesting of certainall remaining unvested equity awards granted to him pursuant toupon the commencement of his employment agreement determined by dividing each of the total number of stock options and restricted stock units granted upon employment by two and then subtracting the number of stock options or restricted stock units, as applicable, that have vested prior to termination.employment.
Key Executive Employment and Severance Agreements
General
Our Key Executive Employment and Severance Agreements (“KEESAs”) set forth the amounts and types of benefits that we believe will enable us to keep our executive officers’ interests aligned with those of our shareholders in the event of a change in control by allowing them to concentrate on taking actions that are in the best interests of our shareholders without consideration of whether their actions may ultimately have an effect on the security of their employment. We also intend for the benefits to recognize past contributions by the executive officers if they are asked to leave, and to help to prevent the departure of key managers in connection with an anticipated or actual change in
control. The KEESAs fulfill these purposes by generally providing for severance in the event of a qualifying termination following a change in control and vesting of outstanding equity awards upon a change in control.
We believe these agreements provide for an equitable financial transition for an executive officer when an adverse change in his or her employment status is required as a result of certain unexpected corporate events. Because these agreements have been entered into for the specific purposes described above, these arrangements do not affect the decisions we make with respect to annual or long-term compensation.
Benefits
Pursuant to the terms of the KEESAs, upon a change in control, all stock options and restricted stock units granted prior to the change in control will become fully and immediately vested. In addition, if we terminate them other than for death, disability or cause, or they resign for good reason, within three years following a change in control, then our named executive officers will be entitled to receive:
In the event their employment is terminated for death or disability within three years following a change in control, our named executive officers will
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57 | 2019 Proxy Statement |
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be entitled to receive the prorated bonus under their KEESAs. If, within three years following a change in control, we terminate the employment of our named executive officers for any reason, or they resign or retire, our named executive officers (or their heirs or estate, as applicable) will also be entitled to receive: any unpaid base salary through the termination date; reimbursement of business expenses incurred through the termination date; any compensation previously deferred by the named executive officer; and the sum of any bonus or incentive compensation allocated or awarded but not yet paid.
The KEESAs also provide that if any portion of the benefits under the KEESAs or any other agreement to which they are a party would constitute an “excess parachute payment” for purposes of the Internal Revenue Code, then they will have the option to receive the total payments and pay the 20% excise tax imposed by the Internal Revenue Code, or have the total payments reduced such that they would not be required to pay the excise tax.
Change in Control Defined
A “change in control” under the KEESAs generally will occur if: any person becomes the beneficial owner of securities representing 20% or more of our outstanding shares of common stock or combined voting power; specified changes occur to our incumbent board of directors; our shareholders approve a merger, consolidation or share exchange with any other corporation, or approve the issuance of voting securities in connection with a merger, consolidation or share exchange; or our shareholders approve a plan of complete liquidation or dissolution or an agreement for the sale or disposition of all or substantially all of our assets.
Non-Compete
Each named executive officer with a KEESA agrees that he or she will not, for a period of six months after the termination date, participate in the management of, be employed by or own any business enterprise at a location within the United States that substantially competes with us or our subsidiaries. In addition, during and following his or her employment, he or she will hold
in confidence, and not directly or indirectly disclose, use or copy, our confidential information and proprietary data. Finally, heeach named executive officer agrees that
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for a period of two years after the termination date, he or she will not hire or solicit for employment any person who is or was employed by us during the twelve months preceding his or her termination.
Equity Awards
Equity award agreements under the Incentive Plan provide that, on a recipient’s death or disability, 100% of any then unexercisable stock options will become exercisable by the recipient until the earlier of one year following the triggering event or the stock option expiration date. In addition, the restricted stock unit and performance share unit agreements generally provide for pro rata vesting in the event of death or disability.disability; provided that, with respect to performance share units, shares will not be issued until the end of the performance period based on the number of months of service during the performance period.
In 2015, our named executive officers executed amendments to their outstandingThe equity award agreements to revise the criteria for retirement and post-retirement treatment of such awards. Followingalso provide that, following a qualified retirement and subject to compliance with ongoing retirement,non-competition, confidentiality and other obligations, all unvested equitystock option and restricted stock unit awards held by an executive officer will continue to vest on their original vesting schedule, and performance share units will vest after the end of the performance period, as if the executive officer had not ceased to be an employee, andemployee. In addition, vested stock options will remain exercisable until the earlier of five years following retirement or the original expiration date of the stock option. Prior to the modifications, all unvested options and a pro rata portion of restricted stock units granted to our executive officers would vest immediately upon retirement. The modifications apply to both previously granted awards and awards to be granted in the future. The compensation committee approved these changes to enable our executive officers to better align their long-term interests with those of our shareholders and to retain the potential value of their awards as they approach possible retirement.
The equity award agreements require our named executive officers to maintain the confidentiality of our confidential information and not to compete with us or solicit our employees or clients while employed by us or during the 12 months following the termination of their employment. In the event the named executive officer breaches these obligations, we are entitled to recover the value of
any amounts previously paid or payable or any shares or the value of any shares delivered pursuant to any of our programs, plans or arrangements.
Upon a change in control, the Incentive Plan provides that if a named executive officer has an employment, retention, change in control or similar
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58 | 2019 Proxy Statement |
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agreement that addresses the effect of a change in control on his or her awards, then such agreement will control. Otherwise, the Incentive Plan provides that the successor or purchaser may assume the equitystock option and restricted stock unit awards or provide substitute awards with similar terms and conditions; provided, that, if within 12 months following the change in control the named executive officer is terminated without cause or terminates his or her employment for good reason, the assumed equity award or such substitute award will become fully vested and exercisable and/or all restrictions on the award will lapse as of the time immediately prior to such termination of employment. In that case, the named executive officer will have 90 days after the termination to exercise an option award unless a longer exercise period is applicable under the agreement, and the confidentiality,non-compete andnon-solicit covenants in the equity award agreement will cease to apply. If the successor or purchaser does not assume the equity awardstock option and restricted stock unit awards or issue a replacement award,awards, then immediately prior to the change in control, each equitystock option and restricted stock unit award subject to the agreements will become fully vested and exercisable and/or all restrictions on the award will lapse.
The award agreements for performance share units provide that, upon a change in control prior to the end of the performance period, the named executive officer will be paid cash in an amount equal to the fair market value (as of the date of the change in control) of such number of shares eligible for issuance at 150% of the target award level. Thereafter, the award will terminate.
In addition, in connection with the First Data transaction, subject to approval of our compensation committee, the performance share units granted in 2017 and 2018 may be adjusted to account for the impact of the acquisition, including by adjusting the applicable performance goals, shortening the applicable performance period, converting the performance share units into time-based awards and/or accelerating the payout of the award. As of the date of this proxy statement, the compensation committee has not, however, made any determination in this regard.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Cash Incentive Awards
Our Incentive Plan provides that, upon a change in control, the successor or purchaser may assume the cash incentive awards to our named executive officers or provide substitute awards with similar terms and conditions. If the successor or purchaser in the change in control does not assume the cash incentive award or issue a replacement award, then any award earned but not yet paid will be paid to the named executive officer. If the cash incentive award is not yet earned, then the award will be canceled in exchange for a cash payment equal to the product of the amount that would have been due under the canceled award as if the performance goals measured at the time of the change in control were achieved at the same rate
through the end of the performance period and a fraction, the numerator of which is the number of whole months that have elapsed from the beginning of the performance period to the date of the change in control and the denominator of which is the number of whole months in the performance period.
Deferred Compensation
The closing of the proposed acquisition of First Data will constitute a change in control for purposes of ournon-qualified deferred compensation plan and, as a result, participant’s vested accounts relating to pre-2018 deferrals will be distributed upon closing in a lump sum.
Estimated Potential Payments Upon Termination or Change in Control
In the tables below, we estimate the maximum amount of compensation payable to each of our named executive officers based on their agreements in effect at, and assuming that the triggering event or events indicated occurred on, December 31, 2015. Mr. Hirsch served as2018. In March 2018, we completed atwo-for-one split of our Chief Financial Officer, Treasurercommon stock. Accordingly, all amounts are presented on a split-adjusted basis and, Assistant Secretary until March 14, 2016 and is expectedwhere applicable, rounded up to retire from our company later this year. Mr. Hirsch does not have an employment agreement with the company and will remain a party to a KEESA until his cessation of service with the company.nearest whole cent. The amounts shown in the tables below rely on the following assumptions:
The amount shown in the table with respect to stock options is equal to the difference between the exercise price of the unvested options which would experience accelerated vesting and $91.46,$73.49, the closing price of our common stock on the last trading day of the calendar year.
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59 | 2019 Proxy Statement |
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common stock on the last trading day of the calendar year. |
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held by him or her as of December 31, 2018 continue to vest on their original vesting schedule, and performance share units granted in 2017 and 2018 vest at a level between the target and maximum, as if the executive officer had not ceased to be an employee. |
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.
Potential PaymentsPayment on a Change in Control without Termination of Employment; Acceleration of Vesting
Name
| Number of Option Shares Vested on Accelerated Basis (#)
| Number of Restricted Stock Units Vested on Accelerated Basis (#)
| Value Realized ($)
| Number of Option Shares Vested on Accelerated Basis (#)
| Number of Restricted Stock Units Vested on Accelerated Basis (#)
| Number of Performance Share Units Vested on Accelerated Basis at 150% of Target Level (#)
| Value Realized ($)
| |||||||||||||||||||||||||||||||||||||||||||
J. Yabuki | 490,952 | 75,471 | 21,216,333 |
| 395,044 |
|
| 184,584 |
|
| 42,924 |
|
| 21,738,467 |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
T. Hirsch | 73,769 | 39,035 | 5,662,751 | |||||||||||||||||||||||||||||||||||||||||||||||
R. Hau |
| 268,104 |
|
| 81,320 |
|
| 29,184 |
|
| 13,347,560 |
| ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
M. Ernst | 148,391 | 9,104 | 4,850,206 | |||||||||||||||||||||||||||||||||||||||||||||||
L. McCreary |
| 29,636 |
|
| 16,432 |
|
| 9,567 |
|
| 2,282,841 |
| ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
K. Gregoire | 21,431 | 27,241 | 3,003,470 | |||||||||||||||||||||||||||||||||||||||||||||||
D. McGranahan |
| 219,106 |
|
| 20,310 |
|
| 44,946 |
|
| 8,615,606 |
| ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||
B. Vielehr | 129,069 | 36,402 | 6,809,138 |
| 97,656 |
|
| 17,064 |
|
| 65,981 |
|
| 6,961,886 |
| |||||||||||||||||||||||||||||||||||
|
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.
.
Potential Payment on a Termination of Employment
Mr. Yabuki
Benefits and Payments
| Death or Disability (Employment Agreement)
| Retirement (Equity Award Agreements)
| Resignation For Good Reason or Termination Without Cause (Employment Agreement)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA)
| Death or Disability Prior to Change in Control (Employment Agreement) ($)
| Retirement (Equity Award Agreements) ($)
| Resignation For Good Reason or Termination Without Cause (Employment Agreement) ($)
| Death or Disability Following Change in Control (KEESA/ Equity Award Agreement) ($)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA/ Equity Award Agreement) ($)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | $ | 3,780,000 | $ | 1,680,000 |
| —
|
|
| —
|
|
| 4,620,000
|
|
| —
|
|
| 1,680,000
|
| |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Incentive Award | — | — | — | 3,325,760 |
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 3,138,862
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prorated Bonus | $ | 1,260,000 | — | 1,260,000 | 1,260,000 |
| 1,470,000
|
|
| —
|
|
| 1,470,000
|
|
| 1,470,000
|
|
| 1,470,000
|
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 14,313,755 | $ | 14,313,755 | 14,313,755 | 14,313,755 |
| 5,018,904
|
|
| 5,018,904
|
|
| 5,018,904
|
|
| 5,018,904
|
|
| 5,018,904
|
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 6,902,578 | 6,902,578 | 6,902,578 | 6,902,578 |
| 13,565,078
|
|
| 13,565,078
|
|
| 13,565,078
|
|
| 13,565,078
|
|
| 13,565,078
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested
|
| 2,975,757
|
|
| 2,975,757
|
|
| 2,975,757
|
|
| 3,154,485
|
|
| 3,154,485
|
| |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COBRA Reimbursement | — | — | 12,417 | — |
| —
|
|
| —
|
|
| 14,174
|
|
| —
|
|
| —
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Employment Benefits | — | — | — | 99,441 |
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 109,175
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 84,000 |
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 84,000
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisor Fees | — | — | — | 15,000 |
| —
|
|
| —
|
|
| —
|
|
| —
|
|
| 15,000
|
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 22,476,333 | $ | 21,216,333 | $ | 26,268,750 | $ | 27,680,534 |
| 23,029,739
|
|
| 21,559,739
|
|
| 27,663,913
|
|
| 23,208,467
|
|
| 28,235,504
|
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Mr. HirschHau
Benefits and Payments
| Death or Disability Prior to Change in Control (Equity Award Agreements)
| Retirement (Equity Award Agreements)
| Death or Disability Following Change in Control (KEESA)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA)
| Death or Disability Prior to Change in Control (Equity Award Agreements) ($)
| Termination Without Cause (Employment Agreement) ($)
| Death or Disability Following Change in Control (KEESA/ Equity Award Agreement) ($)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA/ Equity Award Agreement) ($)
| ||||||||||||||||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | — | — | $ | 1,000,000 |
| —
|
|
| 625,000
|
|
| —
|
|
| 1,250,000
|
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Incentive Award | — | — | — | 1,288,000 |
| —
|
|
| —
|
|
| —
|
|
| 1,499,576
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Prorated Bonus | — | — | $ | 550,000 | 550,000 |
| —
|
|
| —
|
|
| 687,500
|
|
| 687,500
|
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | $ | 2,092,610 | $ | 2,092,610 | 2,092,610 | 2,092,610 |
| 5,226,621
|
|
| 4,566,777
|
|
| 5,226,621
|
|
| 5,226,621
|
| ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 646,805 | 3,570,141 | 3,570,141 | 3,570,141 |
| 2,125,257
|
|
| 3,733,880
|
|
| 5,976,207
|
|
| 5,976,207
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested
|
| 911,056
|
|
| —
|
|
| 2,144,732
|
|
| 2,144,732
|
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Employment Benefits | — | — | — | 120,182 |
| —
|
|
| —
|
|
| —
|
|
| 129,164
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 50,000 |
| —
|
|
| 3,950
|
|
| —
|
|
| 62,500
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisor Fees | — | — | — | 15,000 |
| —
|
|
| —
|
|
| —
|
|
| 15,000
|
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 2,739,415 | $ | 5,662,751 | $ | 6,212,751 | $ | 8,685,933 |
| 8,262,934
|
|
| 8,929,607
|
|
| 14,035,060
|
|
| 16,991,300
|
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
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.
Potential Payment on a Termination of Employment
Mr. ErnstMs. McCreary
Benefits and Payments
| Death or Disability Prior to Change in Control (Equity Award Agreements)
| Resignation For Good Reason or Termination Without Cause (Employment Agreement)
| Death or Disability Following Change in Control (KEESA)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA)
| Death or Disability Prior to Change in Control (Equity Award Agreements) ($)
| Retirement (Equity Award Agreements) ($)
| Resignation for Material Breach or Termination Without Cause (Employment Agreement) ($)
| Death or Disability Following Change in Control (KEESA/ Equity Award Agreements) ($)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA/ Equity Award Agreements) ($)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | $ | 1,080,000 | — | $ | 1,200,000 |
| — |
|
| — |
|
| 450,000 |
|
| — |
|
| 900,000 |
| |||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Incentive Award | — | — | — | 1,772,582 |
| — |
|
| — |
|
| — |
|
| — |
|
| 805,020 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prorated Bonus | — | — | $ | 810,000 | 810,000 |
| — |
|
| — |
|
| 378,656 |
|
| 427,500 |
|
| 427,500 |
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | $ | 4,017,554 | — | 4,017,554 | 4,017,554 |
| 372,174 |
|
| 372,174 |
|
| — |
|
| 372,174 |
|
| 372,174 |
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 208,163 | — | 832,652 | 832,652 |
| 223,189 |
|
| 1,207,588 |
|
| — |
|
| 1,207,588 |
|
| 1,207,588 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested |
| 288,742 |
|
| 581,894 |
|
| — |
|
| 703,079 |
|
| 703,079 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Employment Benefits | — | — | — | 105,070 |
| — |
|
| — |
|
| — |
|
| — |
|
| 105,029 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 60,000 |
| — |
|
| — |
|
| — |
|
| — |
|
| 45,000 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisor Fees | — | — | — | 15,000 |
| — |
|
| — |
|
| — |
|
| — |
|
| 15,000 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,225,717 | $ | 1,080,000 | $ | 5,660,206 | $ | 8,812,858 |
| 884,105 |
|
| 2,161,656 |
|
| 828,656 |
|
| 2,710,341 |
|
| 4,580,390 |
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Mr. GregoireMcGranahan
Benefits and Payments
| Death or Disability Prior to Change in Control (Equity Award Agreements)
| Resignation for Good Reason or Termination Without Cause (Employment Agreement)
| Death or Disability Following Change in Control (KEESA)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA)
| Death or Disability Prior to Change in Control (Equity Award Agreements) ($)
| Termination Without Cause (Employment Agreement) ($)
| Death or Disability Following Change in Control (KEESA/ Equity Award Agreement) ($)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA/ Equity Award Agreement) ($)
| ||||||||||||||||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | $ | 900,000 | — | $ | 900,000 |
| — |
|
| 510,000 |
|
| — |
|
| 1,020,000 |
| ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Cash Incentive Award | — | — | — | 996,120 |
| — |
|
| — |
|
| — |
|
| 1,048,570 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Prorated Bonus | — | — | $ | 450,000 | 450,000 |
| — |
|
| — |
|
| 586,500 |
|
| 586,500 |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | $ | 512,008 | — | 512,008 | 512,008 |
| 3,819,942 |
|
| 3,341,699 |
|
| 3,819,942 |
|
| 3,819,942 |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 921,117 | — | 2,491,462 | 2,491,462 |
| 746,364 |
|
| 1,492,582 |
|
| 1,492,582 |
|
| 1,492,582 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested |
| 1,207,735 |
|
| — |
|
| 3,303,082 |
|
| 3,303,082 |
| ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Employment Benefits | — | — | — | 91,225 |
| — |
|
| — |
|
| — |
|
| 115,797 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 45,000 |
| — |
|
| 3,950 |
|
| — |
|
| 51,000 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisor Fees | — | — | — | 15,000 |
| — |
|
| — |
|
| — |
|
| 15,000 |
| ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,433,125 | $ | 900,000 | $ | 3,453,470 | $ | 5,500,815 |
| 5,774,041 |
|
| 5,348,231 |
|
| 9,202,106 |
|
| 11,452,473 |
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
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.
Potential Payment on a Termination of Employment
Mr. Vielehr
Benefits and Payments
| Death or Disability Prior to Change in Control (Equity Award Agreements)
| Termination Without Cause (Employment Agreement)
| Death or Disability Following Change in Control (KEESA)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA)
| Death or Disability Prior to Change in Control (Equity Award Agreements) ($)
| Retirement (Equity Award Agreements) ($)
| Termination Without Cause (Employment Agreement) ($)
| Death or Disability Following Change in Control (KEESA/ Equity Award Agreements) ($)
| Resignation For Good Reason or Termination Without Cause Following Change in Control (KEESA/ Equity Award Agreements) ($)
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Base Salary | — | $ | 470,000 | — | $ | 940,000 |
| — |
|
| — |
|
| 510,000 |
|
| — |
|
| 1,020,000 |
| |||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Incentive Award | — | — | — | 1,291,800 |
| — |
|
| — |
|
| — |
|
| — |
|
| 1,031,848 |
| |||||||||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prorated Bonus | — | — | $ | 517,000 | 517,000 |
| — |
|
| — |
|
| — |
|
| 586,500 |
|
| 586,500 |
| ||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Options: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | $ | 3,479,811 | 711,288 | 3,479,811 | 3,479,811 |
| 858,909 |
|
| 858,909 |
|
| — |
|
| 858,909 |
|
| 858,909 |
| ||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Stock Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested | 1,664,663 | 1,664,663 | 3,329,327 | 3,329,327 |
| 313,582 |
|
| 1,254,033 |
|
| — |
|
| 1,254,033 |
|
| 1,254,033 |
| |||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unvested |
| 1,693,798 |
|
| 4,370,818 |
|
| — |
|
| 4,848,944 |
|
| 4,848,944 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Employment Benefits | — | — | — | 133,165 |
| — |
|
| — |
|
| — |
|
| — |
|
| 146,094 |
| |||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outplacement Services | — | — | — | 47,000 |
| — |
|
| — |
|
| — |
|
| — |
|
| 51,000 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
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| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisor Fees | — | — | — | 15,000 |
| — |
|
| — |
|
| — |
|
| — |
|
| 15,000 |
| |||||||||||||||||||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 5,144,474 | $ | 2,845,951 | $ | 7,326,138 | $ | 9,753,103 |
| 2,866,289 |
|
| 6,483,760 |
|
| 510,000 |
|
| 7,548,386 |
|
| 9,812,328 |
| |||||||||||||||||||||||||||||||||||||||||
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For the year ended December 31, 2018:
In accordance with Securities and Exchange Commission rules, we used the median employee as of December 31, 2017 in the pay ratio calculation for 2018 because since December 31, 2017, there has been no change in our employee population or employee compensation arrangements that we reasonably believe would significantly impact the pay ratio disclosure. In addition, we do not reasonably believe that there has been a change in the median employee’s circumstances that would result in a significant change to our pay ratio disclosure.
We identified the median employee by examining base cash compensation plus overtime and shift differential for all individuals, excluding our chief executive officer, who were employed by us on December 31, 2017. We included all worldwide employees, whether employed on a full-time, part-time or seasonal basis. We believe base cash compensation is a reasonable basis on which to identify the median employee because those employees who receive cash incentive compensation, commissions or equity awards represent a relatively small portion of our employee population. As of December 31, 2017, we had approximately 24,000 employees, and as of December 31, 2018, we had over 24,000 employees.
Our methodology to identify the median of the annual total compensation of all employees included the following material assumptions, adjustments and estimates:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
With respect to our median employee, we identified and calculated the elements of such employee’s annual total compensation for 2018 in accordance with the requirements of Item 402(c)(2)(x) of RegulationS-K and included the estimated value of such employee’s 2018 employer-paid health care and short-term and long-term disability premiums. With respect to the annual total compensation of our chief executive officer, we used the amount reported in the “Total” column of our 2018 Summary Compensation Table included in this proxy statement plus the estimated value of our chief executive officer’s 2018 employer-paid life insurance, health care insurance and short-term and long-term disability insurance premiums as well as health savings account employer contribution.
The pay ratio described above may not be comparable to the pay ratio of other companies because our employee population, compensation structure, and the assumptions we made and the methodology we used in arriving at the pay ratio, may differ from those at other companies.
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65 | 2019 Proxy Statement |
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16 of the Exchange Act requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. These Section 16 reporting persons are required by Securities and Exchange Commission regulations to furnish us with copies of all Section 16 forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from Section 16 reporting persons, we believe that, during our fiscal year ended December 31, 2015,2018, all Section 16 reporting persons complied with all applicable filing requirements.
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Proposal 3. Ratification of the Appointment of Independent Registered
Public Accounting Firm
Proposal 4. Ratification of the Appointment of Independent Registered Public Accounting Firm |
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Background
The audit committee of the board of directors is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. The audit committee has appointed Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2016.2019. Deloitte has served as our independent registered public accounting firm since 1986.1985. The audit committee from time to time,periodically evaluates the performance and independence of Deloitte to determine whether we should continue to retain the firm. To this end, at least annually, Deloitte makes a presentation to the committee regarding the services it provides, and our chief financial officer provides the committee with his assessment of the firm’s performance. The audit committee is responsible for the audit fee negotiations associated with the retention of Deloitte. In addition, in conjunction with the mandated rotation of Deloitte’s lead engagement partner, the audit committee and its chairman actively participate in the selection of a successor lead engagement partner. The members of the audit committee and the board believe that the continued retention of Deloitte to serve as our independent registered public accounting firm is in the best interests of the company and its shareholders.
A representative of Deloitte is expected to be present at the annual meeting, will have an opportunity to make a statement if he or she so desires, and will be available to respond to appropriate questions.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
Reason for the Proposal
Appointment of our independent registered public accounting firm is not required to be submitted for shareholder approval, but the audit committee of our board of directors is seeking ratification of its appointment of Deloitte as a matter of good corporate practice. If our shareholders do not ratify this appointment, the audit committee of the board of directors will consider it a direction to seek to retain another independent public accounting firm. Even if the appointment is ratified, the audit committee may, in its discretion, appoint a different independent registered public accounting firm at any time if it determines that such a change would be in our shareholders’ best interests.
Vote Required and Recommendation of the Board of Directors
To ratify the appointment of Deloitte as our independent registered public accounting firm, the number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal. Unless otherwise specified, the proxies solicited hereby will be voted to ratify the appointment of Deloitte as our independent registered public accounting firm for 2016.2019.
The board of directors recommends that you vote in favor of“FOR” Proposal 3.4.
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Independent Registered Public Accounting Firm and Fees
The following table presents the aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu Limited, and their respective affiliates (the “Deloitte Entities”) for services provided during 20142018 and 2015.2017.
2018 | 2017 | |||||||||||||||||||||||||||
2014
| 2015
| |||||||||||||||||||||||||||
Audit Fees | $ | 2,491,000 | $ | 2,818,000 |
| $3,380,000
|
| $ | 3,381,000 |
| ||||||||||||||||||
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Audit-Related Fees | 3,352,000 | 3,413,000 |
| 4,886,000
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| 3,898,000 |
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Tax Fees | 634,000 | 699,000 |
| 1,107,000
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| 921,000 |
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All Other Fees | 75,000 | 247,000 |
| —
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| —
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| ||||||||||||||||||||||||||
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| ||||||||||||||||||||||||||
Total | $ | 6,552,000 | $ | 7,177,000 |
| $9,373,000 |
| $ | 8,200,000 |
| ||||||||||||||||||
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Audit Fees. Audit fees are for professional services rendered by the Deloitte Entities in connection with the integrated audit of our annual consolidated financial statements, the review of financial statements included in our quarterly reports on Form10-Q, other statutory audits and other regulatory filings.
Audit-Related Fees. Audit-related fees are for professional services rendered by the Deloitte Entities for service auditor reports.reports, services rendered in connection with the filing of registration statements, and financial due diligence advisory services.
Tax Fees. Tax fees are for tax consultations and tax return preparation and compliance.
All Other Fees. All other fees are for consulting and training services.
Audit CommitteePre-Approval Policy
The audit committee has establishedpre-approval policies and procedures that require audit committee approval of all audit and permittednon-audit services to be provided by its independent registered public accounting firm. In some cases,For certain types of services, the audit committeepre-approves the particular services, subject to certain monetary limits, after the audit committee is presented with a schedule describing the services to be approved. The audit committee’spre-approval policies do not permit the delegation of the audit committee’s responsibilities to management. In 2015,2018, the audit committeepre-approved all services provided by our independent registered public accounting firm.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
In accordance with its written charter, the audit committee provides independent review and oversight of the accounting and financial reporting processes and financial statements of Fiserv, Inc., the system of internal controls that management and the board of directors have established, the audit process and the results of operations of Fiserv, Inc. and its financial condition. Management has the responsibility for preparing the company’s financial statements and Deloitte & Touche LLP (“Deloitte”), the company’s independent registered public accounting firm, has the responsibility for examining those statements.
The audit committee has reviewed and discussed with management and Deloitte the audited financial statements of Fiserv, Inc. for the fiscal year ended December 31, 2015.2018. The audit committee has also discussed with Deloitte the matters required to be discussed by the standards of the Public Company Accounting Oversight Board. The audit committee has received the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the audit committee concerning independence and has discussed with Deloitte its independence. The audit committee haspre-approved all services provided and fees charged by the independent registered public accounting firm to Fiserv, Inc. and has concluded that such services are compatible with Deloitte’s independence.
The audit committee also discussed with management, the internal auditors and Deloitte the quality and adequacy of the internal controls of Fiserv, Inc. and internal auditthe organization, responsibilities, budget and staffing of the internal audit function of Fiserv, Inc. The audit committee reviewed with both Deloitte and the internal auditors their respective audit plans, audit scope and identification of audit risks. Based on the above-mentioned reviews and discussions, the audit committee recommended to the board of directors that the audited financial statements of Fiserv, Inc. be included in its Annual Report on Form10-K for the fiscal year ended December 31, 2015,2018, for filing with the Securities and Exchange Commission.
Thomas C. Wertheimer,Denis J. O’Leary, Chairman
Alison Davis
Christopher M. Flink
Denis J. O’LearyJohn Y. Kim
JD Sherman
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Proposal 4. Shareholder Proposal
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The following proposal was submitted by an individual shareholder and will be voted on at the annual meeting if it is properly presented.The board of directors recommends you vote AGAINST the proposal because Fiserv has already implemented proxy access and asks you to read its Statement in Opposition which follows the proposal below and recommends you vote AGAINST the proposal.The shareholder’s name, address and number of shares of common stock held may be obtained upon written request therefor made to our corporate Secretary.
The following proposal has been included exactly as we received it in accordance with the rules of the Securities and Exchange Commission.Commission:
Proposal 45 - Political Disclosure Shareholder Proxy AccessResolution
RESOLVED: Shareholders ask ourResolved, shareholders request that the Company provide a report, updated semiannually, disclosing the Company’s:
1. | Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. |
2. | Monetary andnon-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: |
a. | The identity of the recipient as well as the amount paid to each; and |
b. | The title(s) of the person(s) in the Company responsible for decision-making. |
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As a long-term shareholder of Fiserv, I support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to adopt,political candidates, parties, or organizations, and presentindependent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for shareholder approval, a “proxy access” bylaw as follows:
Requireelection-related activities are undisclosed and unknown. This proposal asks the Company to includedisclose all of its electoral spending, including payments to trade associations and othertax-exempt organizations, which may be used for electoral purposes. This would bring our Company in proxy materials prepared forline with a shareholder meeting at which directors are to be elected the name, Disclosure and Statement (as defined herein) of any person nominated for election to the board by a shareholder or an unrestrictedgrowing number of shareholders forming a group (the “Nominator”) that meets the criteria established below.
Allow shareholders to voteleading companies, including Intuit Inc., Mastercard Inc., and Visa Inc., which present this information on such nominee on the Company’s proxy card.their websites.
The numberCompany’s Board and shareholders need comprehensive disclosure to fully evaluate the use of shareholder-nominated candidates appearingcorporate assets in proxy materials should not exceed one quarter of the directors then serving or two, whichever is greater. This bylaw should supplement existing rights under Company bylaws, providing that a Nominator must:elections. I ask your support for this critical governance reform.
a) have beneficially owned 3% or more of the Company’s outstanding common stock, including recallable loaned stock, continuously for at least three years before submitting the nomination;
b) give the Company, within the time period identified in its bylaws, written notice of the information required by the bylaws and any Securities and Exchange Commission (SEC) rules about (i) the nominee, including consent to being named in proxy materials and to serving as director if elected; and (ii) the Nominator, including proof it owns the required shares (the “Disclosure”); and
c) certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including thePolitical Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business, not to change or influence control at the Company.
The Nominator may submit with the Disclosure a statement not exceeding 500 words in support of the nominee (the “Statement”). The Board should adopt procedures for promptly resolving disputes over whether notice of a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the priority given to multiple nominations exceeding the one-quarter limit. No additional restrictions that do not apply to other board nominees should be placed on these nominations or re-nominations.
The Security and Exchange Commission’s universal proxy access Rule 14a-11 was unfortunately vacated by 2011 a court decision. Therefore, proxy access rights must be established on a company-by-company basis.
Subsequently,Proxy Access in the United States: Revisiting the Proposed SEC Rule), a cost-benefit analysis by the CFA Institute (Chartered Financial Analyst), found proxy access would “benefit both the markets and corporate boardrooms, with little cost or disruption,” raising US market capitalization by up to $140 billion.
Please vote to enhance shareholder value:
Shareholder Proxy Access –Resolution - Proposal 45
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Fiserv’s Statement in Opposition
The board of directors has carefully considered this proposal and recommends that you vote AGAINST it. As we discuss below, we have already implemented proxy access for director nominations by our shareholders. Accordingly, our board believes no further action is needed andWe do not believe that the reporting of our political contributions in the manner proposed is an appropriate use of our resources as we are already subject to disclosure requirements under federal, state and local laws. Furthermore, U.S. federal law currently prohibits companies from making corporate contributions or providing anything of value directly to any political candidate, campaign committee or national party committee in connection with any federal election. While a company may not make these contributions, it can form a Political Action Committee (“PAC”), which is permitted to direct contributions to candidates for federal office, national party committees or candidates in states where only PAC contributions are permitted. We have chosen not to form a PAC and, therefore, we may not and do not make any such contributions.
We participate in various trade associations to keep abreast of proxy access thatbusiness and technical issues as well as emerging standards within our industry. For example, in 2018, we paid dues to associations such as local and state chambers of commerce and financial services associations. The annual dues for these organizations were generally $10,000 or less, and none were more than $76,000. Because we do not join trade associations for the shareholder proposal seekspurpose of advancing a political agenda, our membership in a particular trade association does not necessarily represent our agreement with all of the association’s positions or views, and the amount of the relevant expenditures is not in the best interests ofsignificant, we do not believe reporting our company or our shareholders.
On February 19, 2016, our board of directors adopted proxy access for the benefit of all shareholders.
Consistent with the desire of our board of directorsdues by trade association would provide meaningful information to adopt changes to our governance structure when it is in the best interests of our shareholders and the company, our board considered various potential formulations of shareholder proxy access, including the types of provisions that the shareholder proposal advocates. We also engaged with a number of our shareholders on the subject of proxy access and they provided valuable feedback, including regarding what terms they view as appropriate for our company. Accordingly, on February 19, 2016, our board of directors amended our by-laws to implement proxy access in the form that it believes is most appropriate for our company and our shareholders and is consistent with current market practices.
Under our proxy access by-law provision:
for election to the board and require us to include such nominees in our proxy materials. For purposes of counting the number of shareholders in a group, a group of funds under common management and investment control is treated as one shareholder.investors.
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A copy of the by-laws, as amended, was attached as an exhibit to our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 19, 2016.
Our board has a strong record of being responsive to shareholder concerns. We regularly engage with and solicit the views of our shareholders on governance matters and will continue to do so. For these reasons, our board of directors believes that our company’s current shareholder proxy access right is in the best interests of our shareholders and that the approach in the shareholder proposal is not appropriate for our company.
Vote Required and Recommendation of the Board of Directors
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the proposal for it to gain approval. Unless otherwise specified, the proxies solicited hereby will be voted against the shareholder proposal.
The board of directors recommends that you vote AGAINST“AGAINST” Proposal 4.5.
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20172020 Annual Meeting
Any proposal that a shareholder desires to include in our proxy materials for our 20172020 annual meeting of shareholders pursuant to Rule14a-8 under the Exchange Act (“Rule14a-8”) must be delivered no later than December 6, 201611, 2019 to the following address: 255 Fiserv Drive, Brookfield, Wisconsin 53045, Attention: Lynn S. McCreary, Chief Legal Officer and Secretary.
We recently amended our by-laws to include a proxy access provision. Under ourby-laws, shareholders who meet the requirements set forth in ourby-laws may under certain circumstances include a specified number of director nominees in our proxy materials. Among other matters, a shareholder must give written notice to our corporate Secretary not less than 120 days and not more than 150 days prior to the first anniversary of the date on which we first made available our proxy materials for the 20162019 annual meeting. Because we commencedwill commence mailing our proxy statement for the 20162019 annual meeting on April 5, 2016,9, 2019, we must receive notice of a shareholder’s director nomination for the 20172020 annual meeting pursuant to the proxy accessby-law provision no sooner than November 6, 201611, 2019 and no later than December 6, 2016.11, 2019. If the notice is received outside of that time frame, then we are not required to include the nominees in our proxy materials for the 20172020 annual meeting.
A shareholder who intends to present business, other than a shareholder proposal pursuant to Rule14a-8, or to nominate a director, other than pursuant to our proxy accessby-law provision, at the 20172020 annual meeting must comply with the requirements set forth in ourby-laws. Among other matters, a shareholder must give written notice to our corporate Secretary not less than 45 days and not more than 70 days prior to the first anniversary of the date on which we first mailed our proxy materials for the 20162019 annual meeting. Because we commencedwill commence mailing our proxy statement for the 20162019 annual meeting on April 5, 2016,9, 2019, we must receive notice of a shareholder’s intent to present business, other than pursuant to Rule14a-8, or to nominate a director, other than pursuant to our proxy accessby-law provision, at the 20172020 annual meeting no sooner than January 25, 2017,30, 2020, and no later than February 24, 2020. If the notice is
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
later than February 19, 2017. If the notice is received outside of that time frame, then we are not required to permit the business or the nomination to be presented at the 20172020 annual meeting. Nevertheless, if our board of directors permits a matter of business submitted after February 19, 201724, 2020 to be presented at the 20172020 annual meeting, then the persons named in proxies solicited by the board of directors for the 20172020 annual meeting may exercise discretionary voting power with respect to such proposal.
Proxy Statement and Annual Report Delivery
Our Annual Report on Form10-K for 20152018 will be made available or mailed to each shareholder on or about April 5, 2016.9, 2019. We will furnish such report, without charge, to any person requesting a copy thereof in writing and stating such person is a beneficial holder of shares of our common stock on the record date for the 20162019 annual meeting. Requests and inquiries should be sent to our corporate Secretary, Lynn S. McCreary, at the address below.
As permitted by rules of the Securities and Exchange Commission, services that deliver our communications to shareholders who hold their stock through a bank, broker or other holder of record may deliver a single copy of our Notice, annual report and proxy statement to multiple shareholders sharing the same address. Upon written or oral request, we will promptly deliver a separate copy of our Notice, annual report and/or proxy statement to any shareholder at a shared address to which a single copy of each document was delivered. Shareholders sharing an address who are currently receiving multiple copies of the Notice, annual report and/or proxy statement may also request delivery of a single copy. Shareholders may make a request by writing to Lynn S. McCreary, Chief Legal Officer and Secretary, Fiserv, Inc., 255 Fiserv Drive, Brookfield, Wisconsin 53045.
By Order of the Board of Directors
Lynn S. McCreary, Secretary
Brookfield, Wisconsin
April 5, 20169, 2019
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Non-GAAP Financial Measures
The Companycompany reports its financial results in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We supplement ourThe company supplements its reporting of information determined in accordance with GAAP, such as revenue, and earnings per share from continuing operations and net cash provided by operating activities, with “adjusted revenue,” “internal revenue growth” andgrowth,” “adjusted earnings per share.share” and “free cash flow.” Management believes that adjustments for certainnon-cash or other items and the exclusion of certain pass-through revenue and expenses should enhance our shareholders’ ability to evaluate our core businessthe company’s performance, becauseas such items do not reflect how we manage our operations. Therefore, we excludemeasures provide additional insights into the factors and trends affecting its business. The company excludes these items from GAAP revenue, and earnings per share from continuing operations and net cash provided by operating activities to calculate these non-GAAP measures.more clearly focus on the factors management believes are pertinent to its operations, and management uses this information to make operating decisions, including the allocation of resources to the company’s various businesses. In this proxy statement, wethe company also disclosediscloses performance goals related to cash incentive awards based on adjusted earnings per share, internal revenue growth and consolidated netadjusted operating profit,income, which is anothernon-GAAP financial measure. Set forth below is a description of these terms:
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Thesenon-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be considered in addition to, and not as a substitute for, revenue, earnings per share from continuing operations, net cash provided by operating activities, operating income or any other amount determined in accordance with GAAP. These non-GAAP measures reflect management’s judgment of particular items and may not be comparable to similarly titled measures reported by other companies.
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Below is a reconciliationare reconciliations of adjusted earnings per share, and internal revenue growth and free cash flow to the most directly comparable measuremeasures determined in accordance with GAAP:
| 2014
| 2015
| 2018
| 2017
| ||||||||||||||||||||||||
GAAP earnings per share from continuing operations | $ | 2.99 | $ | 2.99 |
|
$2.87 |
|
|
$2.86 |
| ||||||||||||||||||
Adjustments – net of income taxes: | ||||||||||||||||||||||||||||
Merger, integration and other costs1 | 0.03 | 0.10 | ||||||||||||||||||||||||||
Merger, integration and other costs(1) | 0.17 | 0.11 | ||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Severance costs | 0.05 | 0.06 |
|
0.03 |
|
|
0.04 |
| ||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Amortization of acquisition-related intangible assets | 0.52 | 0.53 |
|
0.31 |
|
|
0.25 |
| ||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
StoneRiver transactions2 | (0.20) | (0.07) | ||||||||||||||||||||||||||
Loss on early debt extinguishment(2) |
|
0.03 |
|
|
— |
| ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Other3 | (0.03) | 0.25 | ||||||||||||||||||||||||||
Lending Transaction impact(3) |
|
— |
|
|
(0.08) |
| ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Adjusted earnings per share from continuing operations | $ | 3.37 | $ | 3.87 | ||||||||||||||||||||||||
Gain on sale of businesses(4) |
|
(0.37) |
|
|
(0.01) |
| ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Unconsolidated affiliate activities(5) |
|
0.01 |
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|
(0.05) |
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||
Tax reform(6) |
|
0.05 |
|
|
(0.64) |
| ||||||||||||||||||||||
|
|
| ||||||||||||||||||||||||||
Adjusted earnings per share |
|
$3.10 |
|
|
$2.48 |
| ||||||||||||||||||||||
|
|
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Earnings per share is calculated using actual, unrounded amounts. In March 2018, the company completed atwo-for-one split of its common stock. Accordingly, all amounts are presented on a split-adjusted basis.
(1) Merger, integration and other costs include (2) Represents the (3) Represents the earnings attributable to the disposed 55 percent interest of the company’s Lending Solutions
|
(4) Represents the gains on the Lending Transaction in 2018 and the sale of the company’s Australian item processing business in 2017. (5) Represents the company’s share of the net gains
|
(in millions) | 2014
| 2015
| 2018
| 2017
| ||||||||||||||||||||||||
Revenue | $ | 5,066 | $ | 5,254 |
|
$5,823 |
|
|
$5,696 |
| ||||||||||||||||||
Output Solutions postage reimbursements | (327) | (313) |
|
(285)
|
|
|
(281)
|
| ||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Open Solutions deferred revenue adjustment | 4 | 4 | ||||||||||||||||||||||||||
Deferred revenue purchase accounting adjustments |
|
3 |
|
|
8 |
| ||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||
Adjusted revenue | $ | 4,743 | $ | 4,945 |
|
$5,541 |
|
|
$5,423 |
| ||||||||||||||||||
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73 | 2019 Proxy Statement |
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Internal revenue growth is measured as the increase in adjusted revenue for the current year excluding acquired revenue and revenue attributable to dispositions, divided by adjusted revenue from the prior year excluding revenue attributable to dispositions. ThereRevenue attributable to dispositions includes transition services revenue. Acquired revenue was no acquired revenue for the full year 2015,$74 million and revenue in the comparable prior year attributable to dispositions was $2$82 million in 2018. Revenue attributable to dispositions in the prior year was $272 million.
(in millions)
| 2018
| 2017
| ||||||||||||||
Net cash provided by operating activities |
|
$1,552 |
|
|
$1,483 |
| ||||||||||
Capital expenditures |
|
(360) |
|
|
(287) |
| ||||||||||
|
|
|
|
| ||||||||||||
Adjustments: | ||||||||||||||||
|
|
|
|
| ||||||||||||
Severance, merger and integration payments |
|
106 |
|
|
84 |
| ||||||||||
|
|
|
|
| ||||||||||||
StoneRiver cash distributions |
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(2) |
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(45) |
| ||||||||||
|
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|
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| ||||||||||||
Tax reform payments |
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23 |
|
|
— |
| ||||||||||
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|
|
|
| ||||||||||||
Other |
|
— |
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|
(3) |
| ||||||||||
|
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|
|
| ||||||||||||
Tax payments on adjustments |
|
(11) |
| (9) | ||||||||||||
|
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| ||||||||||||
Free cash flow |
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$1,308 |
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$1,223 |
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.
FISERV, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
(Effective July 1, 2019)
1. Purpose
Effective January 1, 2000, the Plan was adopted to provide employees of Fiserv and its Designated Subsidiaries with an opportunity to purchase Common Stock of Fiserv through accumulated payroll deductions. The Plan was amended and restated effective January 1, 2010 following approval by the Fiserv shareholders at the Annual Shareholders Meeting held in May 2009. The Plan was again amended and restated effective December 2, 2013, and subsequently amended and restated effective March 19, 2018, in each case, to make the adjustments required by the Plan as a result of thetwo-for-one split of Fiserv Common Stock effective as of the close of business on each restatement date. The Plan is now amended and restated effective July 1, 2019 (the “Third Restatement Date”) following approval by the Fiserv shareholders at the Annual Shareholders Meeting held in May 2019 or at any adjournment or postponement thereof.
The following sections of the Plan shall apply exclusively to the employees of Fiserv and its participating U.S. subsidiaries, except where noted. It is the intention of Fiserv that this Plan, when applied to such employees, qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed so as to comply with the requirements of that section of the Code.
The Company may, in its discretion, adoptsub-plans of the Plan applicable to particular countries or qualifying subsidiaries outside of the United States that are not intended to comply with the requirements of Section 423 of the Code (a “Non-Section 423 Sub-Plan”); provided however, that (i) the aggregate number of shares of Common Stock which may be sold under the Plan, including anyNon-Section 423Sub-Plan, does not exceed the aggregate number of shares of Common Stock subject to the Plan as provided in Section 13 of this Plan, and (ii) if aNon-Section 423Sub-Plan provides for Company matching contributions, then the purchase price for the Common Stock must be not less than Fair Market Value on the purchase date and the matching contributions may not exceed twenty-five percent (25%) of the Common Stock so purchased.
2. Definitions
a. “Administrator” shall mean one or more officers of Fiserv, or any such delegate thereof.
b. “Board” shall mean the Board of Directors of Fiserv.
c. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. Reference to a section of the Code shall include that section and any comparable section or sections of any future legislation that amends, supplements or supersedes that section.
d. “Committee” shall mean the Compensation Committee of the Board, or any such delegate thereof. If the Compensation Committee shall not be in existence, any reference to the Committee shall mean the Board.
e. “Common Stock” shall mean the Common Stock of Fiserv.
f. “Company” shall mean Fiserv and any U.S. Designated Subsidiary of Fiserv. Except where the context clearly requires otherwise, any reference to “Company” in this Plan shall, with respect to a particular Employee, mean the entity by which he or she is employed.
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75 | 2019 Proxy Statement |
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g. “Compensation” shall mean the total wages, bonuses, commissions and overtime pay compensation paid during an Offering Period by the Company to an Employee, including deferrals described in Sections 415(c)(3)(D) and 132(f)(4) of the Code, but excluding (i) extra compensation based upon special arrangements; (ii) deferred compensation; (iii) reimbursed expenses (including, but not limited to, moving expenses); (iv) expense allowances (including, but not limited to, travel and entertainment expense allowance); (v) stock options and any gain or income attributable thereto; (vi) imputed income with respect to any group life insurance program maintained by the Company on behalf of an Employee; (vii) referral payments; and (viii) other extra compensation (including, but not limited to, cash andnon-cash fringe benefits).
h. “Employee” shall mean a person employed by the Company on or after July 1, 2019; provided, however, that the Administrator may determine, in its sole discretion, in advance of any Offering Period, that any or all of the following groups of otherwise eligible Employees shall be ineligible to participate under the Plan for such Offering Period: (i) employees whose customary employment is for twenty (20) hours of service or less per week, (ii) employees whose customary employment is for not more than five (5) months in any calendar year, (iii) employees who have been employed less than two (2) years, (iv) employees who are “officers” within the meaning of Rule16a-1(f) under the Securities Exchange Act of 1934, and/or (v) “highly compensated employees” as determined under Code Section 423 (or, in each case of items (i) through (iii), such lesser number of hours or period as specified by the Administrator).
Any leased employee, as defined in Code Section 414(n)(2), and any individual performing services for the Company as an independent contractor or other contract service provider under the terms of a contract, agreement or other special arrangement between the Company and the individual, or other third party, that the parties do not contemplate being an employment relationship, shall not be considered as an Employee for any purpose under the Plan.
i. “Enrollment Date” shall mean the first day of each Offering Period.
j. “Exercise Date” shall mean the last Trading Day of each Offering Period.
k. “Fair Market Value” shall mean, as of any date, the closing sales price for a share of Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day on the date of such determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable.
l. “Fiserv” shall mean Fiserv, Inc., a Wisconsin corporation.
m. “Foreign Employee” shall mean an Employee who is a citizen or resident of a foreign jurisdiction (without regard to whether the Foreign Employee is also a citizen of the United States or a resident alien within the meaning of Code section 7701(b)(1)(A)).
n. “Grant Date” shall mean the same day as the Exercise Date; provided, however, that if the Committee or Administrator exercises its power under Section 20 to (i) designate a maximum number of shares that may be purchased by each employee during an Offering Period or (ii) require the application to establish the maximum number of shares that may be purchased by each employee during an Offering Period, then “Grant Date” shall mean the first Trading Day of each Offering Period.
o. “Offering Period” shall mean each of the calendar quarters of each year. The duration of Offering Periods may be changed pursuant to Section 4 of this Plan; provided that in no event may an Offering Period extend beyond twenty-seven (27) months from the Enrollment Date (or such period as may be permitted under Section 423 of the Code) for this Plan or any limit imposed by applicable law for anyNon-Section 423Sub-Plan.
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76 | 2019 Proxy Statement |
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p. “Plan” shall mean this Employee Stock Purchase Plan as it may be amended from time to time.
q. “Purchase Price” shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Exercise Date; provided, however, that the Purchase Price may be adjusted pursuant to Section 20.
r. “Reserves” shall mean the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option.
s. “Subsidiary” shall mean a domestic or foreign corporation (other than Fiserv) in an unbroken chain of corporations beginning with Fiserv if each of the corporations (other than the last corporation in the chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in or of the other corporations in the chain. A corporation shall not fail to be a “Subsidiary” because the entity does not exist or has not yet been acquired by Fiserv or a Subsidiary as of the effective date of this amended and restated Plan.
t. “Trading Day” shall mean a day on which the NASDAQ Stock Market is open for trading.
u. “U.S. Designated Subsidiary” shall mean each Subsidiary that is legally organized in the United States, unless the Administrator excludes, in writing, such entity from participation in the Plan.
3. Eligibility
a. Any Employee who is employed by the Company on a given Enrollment Date, including an Employee who is on an authorized leave of absence on such date, shall be eligible to participate in the Plan. Notwithstanding the foregoing, the Administrator may exclude a Foreign Employee from participating in the Plan, including for any Offering Period intended to comply with Section 423 of the Code, if the grant of an option to such Employee under the Plan is prohibited under the laws of the applicable foreign jurisdiction or if compliance with the laws of such foreign jurisdiction would cause the Plan to violate the requirements of Code Section 423.
b. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of Fiserv or of any Subsidiary and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of Fiserv or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of Fiserv and its Subsidiaries accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock, determined at the Fair Market Value of the shares on the Grant Date of such option (or such other limit imposed by Section 423 of the Code) for each calendar year in which such option is outstanding at any time.
4. Offering Periods
The Plan shall be implemented by consecutive Offering Periods with a new Offering Period commencing on the first day of the calendar quarters of each year, or on such other date as the Committee shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof. The Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings if such change is announced within a reasonable period of time prior to the scheduled beginning of the first Offering Period to be affected thereafter.
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77 | 2019 Proxy Statement |
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5. Participation
a. An eligible Employee may become a participant in the Plan by completing and submitting a participation agreement prior to the applicable Enrollment Date in accordance with the procedures established by the Administrator. An eligible Employee who does not timely complete and submit a participation agreement shall not participate in the Plan for that Offering Period, but shall be eligible to elect to participate in subsequent Offering Periods in which he or she is otherwise eligible.
b. Payroll deductions for a participant shall commence on the first payday following the Enrollment Date and shall end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions
a. At the time a participant submits his or her participation agreement, he or she shall elect to have payroll deductions made on each payday during the Offering Period in any whole percentage, but not exceeding ten percent (10%) of the Compensation (or such lesser amount as is established by the Administrator for such Offering Period) which he or she receives on each payday during the Offering Period. Contributions to the Plan other than by payroll deduction are not permitted.
b. A participant may not change the amount of payroll deductions during an Offering Period, but may change the amount to be deducted for any subsequent Offering Period in accordance with procedures established by the Administrator.
c. A participant may discontinue his or her participation in the Plan, as provided in Section 10 hereof, during an Offering Period by completing and submitting a form provided for such purpose in accordance with the procedures established by the Administrator.
d. A participant’s participation agreement shall remain in effect for successive Offering Periods (including any portion of an Offering Period during which the participant is on an authorized leave of absence, although payroll deductions will be discontinued for any period for which the participant is not receiving Compensation) unless terminated prior to an Offering Period as provided in Section 10 hereof.
e. All payroll deductions made for a participant shall be credited to an unfunded and unsecured bookkeeping account maintained on behalf of the participant and deposited with the general funds of the Company.
f. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period. Payroll deductions so decreased under Section 3(b)(ii) hereof shall recommence at the rate provided in such participant’s participation agreement for the first Offering Period that has a Grant Date in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.
g. Notwithstanding the foregoing, if required by the terms of any 401(k) plan sponsored by the Company, a participant’s payroll deductions may be decreased to zero percent (0%) upon the date such participant receives a hardship withdrawal from such 401(k) plan. In such event, payroll deductions shall automatically recommence on the date permitted by such 401(k) plan.
h. At the time the option is exercised, in whole or in part, or at the time some or all the Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the federal, state or other tax withholding obligations, if any, that arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding
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78 | 2019 Proxy Statement |
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obligations, including any withholding required to make available to Fiserv any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee.
7. Grant of Option
On the Grant Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period (at the applicable Purchase Price) up to a number of shares of the Common Stock determined by dividing such Employee’s accumulated payroll deductions as of the Exercise Date by the applicable Purchase Price; provided that such purchase shall be subject to the limitations set forth in Sections 3(b) and 13 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The Option shall expire on the last day of the Offering Period.
8. Exercise of Option
Unless a participant withdraws from the Plan prior to the Exercise Date in accordance with the withdrawal deadline and other procedures established by the Administrator, as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of shares (including fractional) shall be purchased for such participant at the applicable Purchase Price with the payroll deductions accumulated during the Offering Period. For clarity, in no event shall a fractional share actually be purchased under the Plan; rather, the participant’s Plan Account (as defined in Section 9 below) shall be credited with a fractional share economic interest, without legal title or voting or other legal rights, pursuant to such procedures and rules as are established by the Administrator. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.
If the accumulated payroll deductions cannot be used to purchase shares hereunder due to the application of any limits of the Plan or the Code to such individual, the accumulated amounts that are not used to purchase shares shall be credited to the participant’s Plan Account.
If, on any Exercise Date, the total number of shares of Common Stock to be purchased pursuant to the Plan by all participants would cause the Plan to exceed the number of shares authorized under the Plan (including anyNon-Section 423Sub-Plan) or allocated to such Offering Period by the Administrator, then each participant shall purchase his or her pro rata portion of the shares of Common Stock remaining available under the Plan (including anyNon-Section 423Sub-Plan) based on the amount accumulated for such participant during such Offering Period as compared to the total amount accumulated for all participants during such Offering Period.
9. Delivery
a. As soon as administratively practicable following the Exercise Date, the shares of Common Stock purchased on behalf of a participant pursuant to the exercise of his or her option and any fractional share economic interest will be credited to an account with a transfer agent or a securities brokerage firm, as selected by the Administrator, in the name of the participant (the “Plan Account”). By electing to participate in the Plan, a participant will be deemed to authorize the establishment of a Plan Account in his or her name with the transfer agent or securities brokerage firm selected by Fiserv. Subject to Section 9(b), a participant may request that the transfer agent or securities brokerage firm arrange, subject to any applicable fee, for the delivery to the participant or an account designated by the participant of some or all of the Common Stock held in the participant’s Plan Account. If the participant desires to sell some or all of his or her shares of Common Stock held in his or her Plan Account, he or she may do so (i) by disposing of the shares of Common Stock through the transfer agent or securities brokerage firm subject to any applicable fee, or (ii) through such other means as the Administrator may permit.
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79 | 2019 Proxy Statement |
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b. Before the commencement of any Offering Period, the Administrator may require that (i) any shares of Common Stock purchased under the Plan during such Offering Period be retained in the Plan Account for a designated period of time (and may restrict dispositions during that period) and/or may establish other procedures to restrict transfer of shares of Common Stock and/or (ii) shares of Common Stock purchased under the Plan automatically participate in a dividend reinvestment plan or program established by the Company while held in the Plan Account.
10. Withdrawal
a. At any time during an Offering Period, a participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering Period by submitting to the Company, or a third party designated by the Administrator, a notice of withdrawal in such form as the Company requires. Such withdrawal may be elected at any time, but must be received prior to the end of the Offering Period in accordance with the withdrawal deadline and other procedures established by the Administrator. Upon withdrawal from the Offering Period by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions under the Offering Period, without interest, and such participant’s interest in the Offering Period shall be automatically terminated. A participant’s withdrawal from an Offering Period will have no effect on his or her eligibility to participate in subsequent Offering Periods that commence after the termination of the Offering Period from which the participant withdraws, but the participant will be required to complete and submit a new participation agreement in order to participate in subsequent Offering Periods under the Plan.
b. A participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan, which may hereafter be adopted by Fiserv.
11. Termination of Employment; Leave of Absence
Upon a participant ceasing to be an Employee for any reason, including death, he or she shall be deemed to have elected to withdraw from the Plan and his or her payroll deductions accumulated during the Offering Period, but not yet used to purchase shares of Common Stock, shall be returned to such participant, or participant’s beneficiary, and such participant’s option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant’s customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice. For purposes of this Section 11, a participant will not be deemed to have terminated employment in the case of any leave of absence approved by the Company.
12. Interest
No interest shall accrue on the payroll deductions of a participant in the Plan.
13. Stock
a. Subject to adjustment upon changes in capitalization of Fiserv as provided in Section 19 hereof, the maximum number of shares of the Common Stock which shall be made available for sale under the Plan (including anyNon-Section 423Sub-Plan) after the Third Restatement Date, regardless of the number of shares previously approved for sale under the Plan that remain available as of the Third Restatement Date, shall be limited to twenty-five million (25,000,000) shares. If, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan (including anyNon-Section 423Sub-Plan), the Administrator shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
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80 | 2019 Proxy Statement |
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b. For the avoidance of doubt, the aggregate number of shares of Common Stock which may be sold under the Plan, including anyNon-Section 423Sub-Plan, shall not exceed the aggregate number of shares of Common Stock subject to the Plan as provided in this Section 13.
c. A participant shall have no interest or voting right in shares covered by his or her option until the option has been exercised; provided that, a participant’s fractional share economic interest obtained upon exercise is subject to the limitations set forth in Section 8.
d. Whole shares to be delivered to a participant under the Plan shall be registered solely in the name of the participant.
14. Administration
a. The Plan shall be administered by the Committee or the Administrator, as specified herein. If the Plan does not specify whether the Committee or Administrator has specific authority with respect to an aspect of the Plan, such authority shall reside with the Administrator, unless applicable law requires such authority to reside with the Committee.
b. The Committee or the Administrator, to the extent of their authority, shall have full and exclusive discretionary authority to administer the Plan, including, without limitation, the authority to (i) construe, interpret and apply the terms of the Plan; (ii) determine eligibility and to adjudicate all disputed claims filed under the Plan; (iii) establishsub-plans, policies, interpretations, practices and procedures of this Plan; (iv) prescribe and require the use of appropriate forms (including electronic forms); (v) prepare reports, notices, and any other documents related to the Plan; (vi) hire all persons (including third-party vendors) providing services to the Plan; and (vii) delegate to one or more individuals such duties and functions related to the operation and administration of the Plan as they so determine, except to the extent prohibited by applicable law.
c. Every finding, decision and determination made by the Committee or the Administrator shall, to the full extent permitted by law, be final and binding upon all parties.
d. All participation agreements, forms and notices required hereunder may be provided or made available in paper form, electronically or telephonically, as the Administrator specifies.
15. Transferability
Neither payroll deductions accumulated on behalf of a participant or any rights to exercise an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the participant. Any such attempt at assignment transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10 hereof.
16. Use of Funds
All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.
17. Payment of Expenses
The Administrator may specify that all or some of the costs of administering and carrying out the Plan, including any costs incurred with respect to the sale or transfer of shares of Common Stock from a Plan Account, shall be borne by the Company and/or charged to participants’ Plan Accounts. The Administrator need not treat participants uniformly unless so required by Code Section 423.
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81 | 2019 Proxy Statement |
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18. Reports
Individual Plan Accounts shall be maintained for each participant in the Plan. Statements of account shall be made available to participating Employees after the end of each Offering Period setting forth with respect to such Offering Period the number of shares purchased and the price per share thereof, and also setting forth the total number of shares then held in each Plan Account.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale
a. Changes in Capitalization. Subject to any required action by the shareholders of Fiserv, the Reserves, the maximum number of shares each participant may purchase per Offering Period, as well as the price per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by Fiserv; provided, however, that conversion of any convertible securities of Fiserv shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board or Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by Fiserv of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.
b. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of Fiserv, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board or Committee. The New Exercise Date shall be before the date of Fiserv’s proposed dissolution or liquidation as determined by the Board or Committee. The Company shall notify each participant in writing in advance of the New Exercise Date that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.
c. Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of Fiserv, or the merger of Fiserv with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period then in progress shall be shortened by setting a New Exercise Date. The New Exercise Date shall be before the date of Fiserv’s proposed sale or merger as determined by the Board or Committee. The Company shall notify each participant in writing in advance of the New Exercise Date that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.
20. Amendment or Termination
a. The Board or Committee may at any time and for any reason terminate or amend the Plan. The Administrator may also amend the Plan in any manner not prohibited by applicable law. Except as provided in Section 19, no such termination can affect options previously granted. Nevertheless, an Offering Period may be terminated by the Board or Committee before any Exercise Date if the Board or Committee, as applicable, determines that the termination of the Offering Period or the Plan is in the best interest of Fiserv and its shareholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in
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82 | 2019 Proxy Statement |
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any option theretofore granted that adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any other applicable law, regulation or stock exchange rule), Fiserv shall obtain shareholder approval in such a manner and to such a degree as required.
b. Without shareholder approval or consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Committee or Administrator (to the extent permitted by applicable law) shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange rate applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Committee or Administrator determines in its sole discretion advisable, that are consistent with the Plan.
c. In the event the Board or Committee determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board or Committee may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequences including, but not limited to:
i. altering the Purchase Price for any Offering Period, including an Offering Period underway at the time of the change in Purchase Price;
ii. shortening any Offering Period so that the Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board or Committee action; and
iii. allocating shares.
Such modifications or amendments shall not require shareholder approval or the consent of any Plan participants.
d. In the event the Board or Committee determines that the terms of the Plan or any option will not comply with the laws of a foreign jurisdiction applicable to Foreign Employees, the Board or Committee may modify or amend the Plan or any option to comply with such laws; provided that such amendments or modifications to the Plan or an option as applied to such Foreign Employees do not provide more favorable terms than are applied to Employees resident in the United States as provided by Section 423 of the Code. Such modifications or amendments shall not require shareholder approval or the consent of any Plan participants.
21. Notices
All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares
Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements
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83 | 2019 Proxy Statement |
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of any stock exchange upon which the shares may then be listed. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for Fiserv, such a representation is required by any of the aforementioned applicable provisions of law.
23. Term of Plan
The Plan, as amended and restated, became effective on the Third Restatement Date. It shall continue in effect for a term of ten (10) years from July 1, 2019 unless sooner terminated under Section 20 hereof.
24. No Employment Rights
The Plan does not, directly or indirectly, create in any Employee or class of Employees any right with respect to continuation of employment by the Company, and it may not be deemed to interfere in any way with the Company’s right to terminate, or otherwise modify, an Employee’s employment at any time.
25. Effect of Plan
The provisions of the Plan, in accordance with its terms, will be binding upon, and inure to the benefit of, all successors of each Employee participating in the Plan including, without limitation, the Employee’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of the Employee.
26. Governing Law
The Plan will be construed, interpreted, applied and enforced in accordance with the laws of the State of Wisconsin, other than its laws regarding choice of laws, except to the extent that the state law is preempted by any federal law.
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84 | 2019 Proxy Statement |
FISERV, INC. 255 FISERV DRIVE BROOKFIELD, WI 53045 | VOTE BY INTERNET-www.proxyvote.com | |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | ||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS | ||
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | ||
VOTE BY PHONE -1-800-690-6903 | ||
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||
VOTE BY MAIL | ||
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E06899-P75602 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
E59356-P17787 | KEEP THIS PORTION FOR YOUR RECORDS |
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — |
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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FISERV, INC. | For | Withhold | For All | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR all the nominees listed: | All | All | Except | |||||||||||||||||||||||||||||||||||
1. | Election of Directors | ☐ | ☐ | ☐ |
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Nominees: | ||||||||||||||||||||||||||||||||||||||
01) |
Alison Davis |
06) |
Glenn M. Renwick | |||||||||||||||||||||||||||||||||||
02) | Harry F. DiSimone | 07) | Kim M. Robak | |||||||||||||||||||||||||||||||||||
03) | John Y. Kim | 08) | JD Sherman | |||||||||||||||||||||||||||||||||||
04) | Dennis F. Lynch | 09) | Doyle R. Simons | |||||||||||||||||||||||||||||||||||
05) | Denis J. O’Leary | 10) | Jeffery W. Yabuki | |||||||||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following proposal: |
For |
Against |
Abstain |
The Board of Directors recommends you vote FOR the following proposal: |
For |
Against |
Abstain | |||||||||||||||||||||||||||||||
2. | To approve the Fiserv, Inc. Amended and Restated Employee Stock Purchase Plan. | ☐ | ☐ | ☐ | 4. | To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm ofFiserv, Inc. for 2019. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||
The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | The Board of Directors recommends you vote AGAINST the following proposal: | For | Against | Abstain | |||||||||||||||||||||||||||||||
3. | To approve, on an advisory basis, the compensation of the named executive officers of Fiserv, Inc. | ☐ | ☐ | ☐ | 5. | A shareholder proposal requesting the company provide a political contribution report. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||||
NOTE:If other matters properly come before the meeting or any adjournment or postponement thereof, the undersigned also authorizes the named proxies to vote on such matters in their discretion. | ||||||||||||||||||||||||||||||||||||||
Yes | No | |||||||||||||||||||||||||||||||||||||
Please indicate if you plan to attend this meeting. | ☐ | ☐ | ||||||||||||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX]
| Date
| Signature (Joint Owners)
| Date
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting and Proxy Statement and Annual Report for the Year Ended December 31, 20152018
are available atwww.proxyvote.com.
E06900-P75602
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E59357-P17787
FISERV, INC. Annual Meeting of Shareholders May This proxy is solicited by the Board of Directors | ||||
The undersigned hereby appoints | ||||
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder.If no direction is made, this proxy will be voted | ||||
This proxy covers all the shares for which the undersigned has the right to give voting instructions to Vanguard Fiduciary Trust Company, Trustee of the 401(k) Savings Plan of Fiserv, Inc. and its Participating Subsidiaries (the “Plan”). This proxy, when properly executed, will be voted as directed. If voting instructions are not received by the proxy tabulator by 11:59 pm ET on May | ||||
Continued and |