SCHEDULE 14A INFORMATION
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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Fiserv, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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/ / 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
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<PAGE>
Fiserv
255 Fiserv Drive
Brookfield, Wisconsin 53045
February 17, 1997
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of
Fiserv, Inc. (the "Company"), to be held at the Company's corporate offices at
10:00 a.m., Central Standard Time, Thursday, March 20, 1997, in the Company's
Education Center located on the second floor.
Information about the meeting and the matters on which shareholders will act is
set forth in the accompanying Notice of Meeting and Proxy Statement. Following
action on these matters, management will present a current report on the
activities of the Company. At the meeting, we will welcome your comments on or
inquiries about the business of the Company that would be of interest to
shareholders generally.
At your earliest convenience, please review the information on the business to
come before the meeting.
It is very important that you 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. Whether or not you plan to attend the meeting, please mark,
sign and return your proxy card promptly in the enclosed envelope which requires
no postage if mailed in the United States. This will not prevent you from voting
in person, but will ensure that your vote is counted if you are unable to
attend.
Thank you for your prompt attention.
Sincerely,
/S/ GEORGE D. DALTON
George D. Dalton
Chairman,
Chief Executive Officer
<PAGE>
Fiserv
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 20, 1997
CUSIP # 337738-10-8
To the Shareholders of Fiserv, Inc.:
The Annual Meeting of Shareholders of Fiserv, Inc. (the "Company") will be held
at the Corporate Offices on Thursday, March 20, 1997, at 10:00 a.m., Central
Standard Time, for the following purposes, all of which are set forth more
completely in the accompanying Proxy Statement:
1. To elect two Directors to serve for a three-year term expiring
in 2000, and in each case until their successors are elected
and qualified;
2. To approve certain amendments to the Fiserv, Inc. Stock Option Plan
(the "Plan") as discussed in detail herein;
3. To approve the appointment of Deloitte & Touche LLP,
Milwaukee, Wisconsin, as independent auditors of the Company
and its subsidiaries for the fiscal year ending December 31,
1997; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on February 3, 1997, as
the record date for determining shareholders entitled to notice of and to vote
at the Annual Meeting and at any adjournments or postponements thereof.
In the event there are not sufficient votes for a quorum or to approve or ratify
any of the foregoing proposals at the time of the Annual Meeting, the Annual
Meeting may be adjourned or postponed in order to permit further solicitation of
proxies by the Company.
By Order of the Board of Directors
/S/ CHARLES W. SPRAGUE
Charles W. Sprague
Secretary
February 17, 1997
YOUR VOTE IS IMPORTANT. THE PROXY STATEMENT IS INCLUDED WITH THIS NOTICE.
TO VOTE YOUR SHARES, PLEASE MARK,SIGN, DATE AND RETURN YOUR PROXY CARD AS SOON
AS POSSIBLE. A RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. SHAREHOLDERS
ATTENDING THE MEETING MAY WITHDRAW THEIR PROXIES AT ANY TIME PRIOR TO THE
EXERCISE THEREOF AS FURTHER DESCRIBED HEREIN.
<PAGE>
PROXY STATEMENT
Solicitation of Proxies
This Proxy Statement is being mailed on or about February 17, 1997, to
the holders of record as of February 3, 1997, of common stock, $.01 par value
per share ("Common Stock"), of Fiserv, Inc. (the "Company") in connection with
the solicitation by the Board of Directors of proxies in the enclosed form for
the Annual Meeting of Shareholders (the "Annual Meeting") to be held at the
Company's offices, 255 Fiserv Drive, Brookfield, Wisconsin 53045, on March 20,
1997, and at any and all adjournments or postponements thereof. Pursuant to the
Wisconsin Business Corporation Law, a shareholder may revoke a writing
appointing a proxy either by giving notice to the Company in writing or in open
meeting. Any shareholder giving a proxy has the power to revoke it at any time
before it is exercised by (i) filing with the Secretary written notice thereof
(Charles W. Sprague, Executive Vice President, General Counsel and Secretary,
Fiserv, Inc., 255 Fiserv Drive, Brookfield, Wisconsin 53045); (ii) submitting a
duly-executed proxy bearing a later date; or (iii) appearing at the Annual
Meeting and giving the Secretary notice of his or her intention to vote in
person.
The cost of solicitation of proxies by mail on behalf of the Board of
Directors will be borne by the Company. Proxies also may be solicited by
personal interview or by telephone, in addition to the use of the mail, by
directors, officers and regular employees of the Company, without additional
compensation therefor. The Company also has made arrangements with brokerage
firms, banks, nominees and other fiduciaries to forward proxy solicitation
materials for shares of Common Stock held of record by the beneficial owners of
such shares. The Company will reimburse such holders for their reasonable
out-of-pocket expenses.
Proxies solicited hereby will be returned to the Board of Directors,
and will be tabulated by inspectors of election designated by the Board of
Directors, who will not be employed by or a director of the Company, or any of
its affiliates.
Purposes of Annual Meeting
The Annual Meeting has been called for the purposes of (i) electing two
Directors to serve for a three-year term expiring in 2000; (ii) approving
certain amendments to the Fiserv, Inc. Stock Option Plan (the "Plan"); (iii)
approving the appointment of Deloitte & Touche LLP, Milwaukee, Wisconsin, as the
independent auditors of the Company and its subsidiaries for the fiscal year
ending December 31, 1997; and (iv) transacting such other business as may
properly come before the Annual Meeting or any adjournments or postponements
thereof.
The persons named as proxies in the enclosed proxy have been selected
by the Board of Directors and will vote shares represented by valid proxies.
They have indicated that, unless otherwise specified in the Proxy, they intend
to vote (i) to elect as Directors for their respective terms the nominees noted
herein; (ii) for approval of the amendments to the Plan; and (iii) for approval
of the appointment of Deloitte & Touche LLP, Milwaukee, Wisconsin, as the
independent auditors of the Company and its subsidiaries for the fiscal year
ending December 31, 1997. The Board of Directors has no reason to believe that
any of the nominees will be unable to serve as a Director. In the event,
however, of the death or unavailability of any nominee or nominees, the proxy to
vote in favor of the election of such nominee or nominees will be voted for such
other person as the Board of Directors may recommend.
The Company has no knowledge of any other matters to be presented at
the Annual Meeting. In the event other matters are properly brought before the
Annual Meeting or any adjournments or postponements thereof, the persons named
in the proxy will vote in accordance with their best judgment on such matters.
Voting Securities
The Board of Directors has fixed the close of business on February 3,
1997, as the record date (the "Voting Record Date") for determining shareholders
entitled to notice of and to vote at the Annual Meeting. On January 29, 1997,
there were 45,359,963 shares of Common Stock outstanding and entitled to vote,
and the Company had no other class of securities outstanding. All of these
shares are to be voted as a single class, and each holder is entitled to one
vote for each share held of record on all matters submitted to a vote of
shareholders. 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, shall
constitute a quorum for the transaction of business. A quorum being present, all
matters, other than the election of directors, shall require the affirmative
vote of a majority of the total votes cast in person or by proxy in order to be
approved. Directors will be elected by a plurality of votes cast at the Annual
Meeting. Abstentions will be included in the determination of shares present and
voting for purposes of determining whether a quorum exists. Broker non-votes
will not be so included. Neither abstentions nor broker non-votes are counted in
determining whether a proposal has been approved. In the event there are not
sufficient votes for a quorum or to approve or ratify any proposal at the time
of the Annual Meeting, the Annual Meeting may be adjourned or postponed in order
to permit the further solicitation of proxies.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the
beneficial ownership of Common Stock as of December 31, 1996 (except as
otherwise noted below) by (i) each shareholder known to the Company to own
beneficially more than 5% of the shares of Common Stock outstanding, as
disclosed in certain reports regarding such ownership filed with the Company and
with the Securities and Exchange Commission (the "Commission"), in accordance
with Sections 13(d) and 13(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); (ii) each Director and Director nominee of the Company;
(iii) each of the executive officer(s) of the Company appearing in the Summary
Compensation Table below; and (iv) all Directors and executive officers as a
group.
<TABLE>
<CAPTION>
Number of Shares of Options Exercisable
Common Stock Within 60 Days After
Name Beneficially Owned (1)(2) December 31, 1996 Percent of Class*
<S> <C> <C> <C>
George D. Dalton............................ 560,182 50,018 1.2%
Leslie M. Muma.............................. 487,305 43,420 1.0%
Donald F. Dillon............................ 2,618,577 5,552 5.6%
Kenneth R. Jensen........................... 366,399 33,345 **
Gerald J. Levy.............................. 47,177 5,475 **
L. William Seidman.......................... 21,225 5,475 **
Thekla R. Shackelford....................... 5,300 2,100 **
Roland D. Sullivan.......................... 45,040 5,375 **
Dean C. Schmelzer........................... 57,660 4,062 **
All Directors and executive
officers as a group (16 persons)........... 4,985,563 205,880 10.7%
</TABLE>
* As of the Voting Record Date.
** Amount represents less than 1% of the total number of shares of Common
Stock outstanding on the Voting Record Date.
(1) Unless otherwise indicated, includes shares of Common Stock held
directly by the individuals as well as by members of such individuals'
immediate family who share the same household, shares held in trust and
other indirect forms of ownership over which shares the individuals
exercise sole or shared voting and/or investment power. Each person on
the above table disclaims beneficial ownership of shares owned by his or
her spouse, minor children or other relatives.
(2) Includes shares which are subject to outstanding options exercisable
within 60 days after December 31, 1996, as set forth above.
MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
Matter 1. Election of Directors
The following is a summary of certain information concerning the nominees for
Director and continuing Directors of the Company. There are no family
relationships among any of the directors and/or executive officers of the
Company. No person being nominated as a director is being proposed for election
pursuant to any agreement or understanding between any person and the Company.
Nominees for three-year term expiring in 2000:
George D. Dalton (age 68) has been Chairman of the Board of Directors
since it was established in 1984. From 1964 to 1984, Mr. Dalton was President
of one of the Company's predecessors, First Data Processing, Inc., a subsidiary
of First Bank System, Inc. Mr. Dalton has over 40 years of data processing
experience. He also serves as a Director of ARI Network Services, Inc. (sales
network software), Milwaukee, Wisconsin, and APAC TeleServices, Inc.
(telemarketing), Deerfield, Illinois.
Principal Occupation: Chairman of the Board of Directors and
Chief Executive Officer of the Company.
L. William Seidman (age 75) has been a Director of the Company since
1992. Mr. Seidman became Chairman of the Federal Deposit Insurance Corporation
in October 1985 and Chairman of the Resolution Trust Company in 1989, and held
such positions until October 1991. From 1982 to 1985, he was Dean of the College
of Business at Arizona State University, Tempe, Arizona. From 1977 to 1982, he
was Vice Chairman and Chief Financial Officer of Phelps Dodge Corporation. Mr.
Seidman was President Gerald Ford's Assistant for Economic Affairs from 1974 to
1977. From 1968 to 1974, he was managing partner of Seidman & Seidman, Certified
Public Accountants. He served as Chairman in 1970 and Director of the Detroit
Branch of the Federal Reserve Bank of Chicago from 1966 to 1970. He also was
Special Assistant for Financial Affairs to Michigan Governor George Romney from
1963 to 1966.
Principal Occupation: Chief Commentator for CNBC, Washington, D.C., and
Publisher of Bank Director Magazine, Brentwood,
Tennessee.
The affirmative vote of a plurality of the votes cast is required for
the election of directors. Unless otherwise specified, the shares of Common
Stock represented by the proxies solicited hereby will be voted in favor of the
above-described nominees.
The Board of Directors recommends that you vote FOR the election of the
nominees for director.
Information With Respect to Continuing Directors
Continuing terms expiring in 1998:
Kenneth R. Jensen (age 53) has been Executive Vice President, Chief
Financial Officer, Treasurer, Assistant Secretary and a Director of the Company
since it was established in 1984. He became Senior Executive Vice President of
the Company in 1986. In 1983, Mr. Jensen was Chief Financial Officer of SunGard
Data Systems, Inc., a computer services company. From 1968 to 1982, Mr. Jensen
was a founder and Chief Financial Officer of Catallactics Corporation, a
financial services company, and from 1974 to 1980, also was Chief Financial
Officer of Market Research Corporation of America. Mr. Jensen has over 30 years
of experience in the data processing industry.
Principal Occupation: Senior Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary of
the Corporation.
Roland D. Sullivan (age 77) has been a Director of the Company since
1986. Mr. Sullivan was the Myers Regents Professor of Management at St. Johns
University from 1983 to 1990. He has an extensive background in strategic
planning and management, and is known throughout the financial industry. From
1938 to 1983, Mr. Sullivan served First Bank System, Inc. in various capacities,
including Vice President - Strategic Information Systems and Technology
Planning; and as Executive Vice President of Research and Planning - First
Computer Corporation, a subsidiary of First Bank System, Inc. From 1991 to 1996,
Mr. Sullivan was associated with Sendero Corporation, a wholly owned subsidiary
of the Company, most recently as Chairman and Chief Executive Officer. During
1995 and 1996, he also served as Midwest Region Executive, Savings & Community
Bank Group of the Company. He presently serves as a consultant to the Company.
Principal Occupation: Financial Consultant.
Thekla R. Shackelford (age 62) was appointed a Director of the Company
in 1994. Ms. Shackelford is an Educational Consultant and served as President of
the National Professional Association for Education Consultants from 1987-1988.
Prior to 1987, she was Director of Development of the Buckeye Boys Ranch located
in Columbus, Ohio. She currently is serving as Chairman of the I KNOW I CAN
scholarship board in Columbus, Ohio, and is a director of Banc One Corporation
(banking) and Wendy's International, Inc. (restaurants), both Columbus, Ohio.
Ms. Shackelford is the recipient of numerous awards for community service and
educational achievements.
Principal Occupation: Educational Consultant.
Continuing terms expiring in 1999:
Leslie M. Muma (age 52) has been a Director of the Company since it was
established in 1984, and was named Vice Chairman of the Board of Directors in
1995. From 1971 to 1984, Mr. Muma was the President of one of the Company's
predecessors, Data Management Resources, Inc., a wholly owned subsidiary of
Freedom Savings & Loan Association, Tampa, Florida. Mr. Muma has over 30 years
of data processing experience. He also serves as a Director of MGIC Investment
Corporation (mortgage insurance), Milwaukee, Wisconsin.
Principal Occupation: Vice Chairman of the Board of Directors of
the Company, President and Chief Operating
Officer of the Company.
Gerald J. Levy (age 64) has been a Director of the Company since 1986.
He is known nationally for his involvement in various financial industry
memberships and organizations. Mr. Levy is a past Director and Chairman of the
United States League of Savings Institutions, and served as Chairman of its
Government Affairs Policy Committee. Since 1959, Mr. Levy has served Guaranty
Bank, S.S.B., Milwaukee, Wisconsin, in various capacities, including Chief
Executive Officer from 1973 to the present. He also serves as Director of
Guaranty Bank, S.S.B., Guaranty Financial Mutual Holding Corp., the holding
company of Guaranty Bank, S.S.B., and Republic Mortgage Insurance Company, all
Milwaukee, Wisconsin.
Principal Occupation: Chief Executive Officer of Guaranty Bank, S.S.B.
since 1984.
Donald F. Dillon (age 56) was elected to and named Vice Chairman of the
Board of Directors of the Company in May 1995. In 1976, Mr. Dillon and an
associate founded Information Technology, Inc. ("ITI"), a turnkey software
company, which has grown to become a leading national provider of banking
software and services. ITI was acquired by the Company in May 1995, and Mr.
Dillon continues in his position as Chairman and President of ITI. From 1966 to
1976, Mr. Dillon was with the National Bank of Commerce, Lincoln, Nebraska, and
served most recently as Senior Vice President - Information Management Division.
Mr. Dillon has over 30 years of experience in the financial and data processing
industries. He also serves as Secretary of the Board of Trustees and Executive
Committee Member for Doane College in Crete, Nebraska, and is a Member of the
Board of Trustees for the University of Nebraska and a Member of the University
of Nebraska's Directors Club.
Principal Occupation: Vice Chairman of the Board of Directors of the
Company, Chairman and President, ITI.
<PAGE>
Matter 2. Approval of Amendments to the Fiserv, Inc. Stock Option Plan
Description of Proposed Material Amendments to the Plan
On February 11, 1997, the Board of Directors of the Company adopted,
subject to shareholder approval at the Annual Meeting, amendments to the Fiserv,
Inc. Stock Option Plan (the "Plan") that, among other things, will (i) provide
that the Plan be administered by "Non-Employee Directors" (within the meaning of
Rule 16b-3 promulgated under the Exchange Act) and (ii) eliminate mandatory
grants of options to Non-Employee Directors.
Description of Material Features of the Amended Plan
The following summary of certain material features of the Plan, as it
was amended, does not purport to be complete and is qualified in its entirety by
reference to the text of the Plan, a copy of which is set forth as Exhibit A to
this Proxy Statement. Unless otherwise indicated, all references are to the Plan
as proposed to be amended.
Shares Subject to the Plan and Eligibility
The Plan authorizes the grant of options to purchase shares of Common
Stock (subject to adjustment as provided below) to employees (including officers
and directors who are employees) and Non-Employee Directors of the Company. Upon
expiration, cancellation or termination of exercised options granted under the
Plan, the shares of Common Stock subject to such options will again be available
for the grant of options under the Plan. As of December 31, 1996, all four
Non-Employee Directors of the Company and all employees of the Company were
eligible to participate in the Plan. The shares of Common Stock to be issued by
the Company upon the exercise of options by optionees may be acquired either
through open market purchases by the Company, or issued from authorized but
unissued shares of Common Stock.
As of December 31, 1996, options to purchase 2,601,300 shares of Common
Stock were granted under the Plan and a total of 4,035,000 options were
available for granting under the Plan.
Type of Options
Options granted under the Plan may be either incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), or non-qualified stock options which do not qualify as
ISOs ("NQSOs"). ISOs, however, may only be granted to employees.
Administration
The Plan is administered by a committee of the Board of Directors
(the "Committee") consisting of at least two members of the Board, each of whom
is a Non-Employee Director, and also an "outside director" within the meaning
of Section 162 (m) of the Code. The Committee members currently are those
persons listed as comprising the Compensation Committee on Page 11.
On May 31, 1996, the Commission adopted the final revisions to the
rules and forms promulgated under Section 16 of the Exchange Act (the "Final
Section 16 Rules") which govern the reporting obligations and short-swing profit
liability of statutory insiders of public companies. Under the former Section 16
rules, one of the requirements was that administration of stock plans be
"disinterested" in order to exempt transactions thereunder from short-swing
profit liability. This requirement has been eliminated under the Final Section
16 Rules, and now one method of exempting option grants from short-swing profit
liability is for each grant to be approved in advance by either the entire Board
or a committee of two or more "Non-Employee Directors" (as defined under the new
rules). Accordingly, to comply with the Final Section 16 Rules and ensure future
option grants to participants subject to Section 16 are exempt from short-swing
profit liability, the Plan, as amended, provides for general administration by a
committee of Non-Employee Directors, with grants to Non-Employee Directors to be
approved by the full Board of Directors and grants to participants other than
Non-Employee Directors to be approved by the committee of Non-Employee
Directors.
Among other things, the Board of Directors (with respect to grants to
Non-Employee Directors) and the Committee (with respect to grants to
participants other than Non-Employee Directors) are empowered to determine in
accordance with various Plan provisions: (i) the persons to whom options are
granted; (ii) the times on which options are granted; (iii) whether an option
will be an ISO or an NQSO; (iv) the number of shares of Common Stock subject to
a particular option and the option price therefor; (v) the term of each option;
(vi) the time and conditions under which an option may be exercised in whole or
in part; (vii) the form of consideration that may be used by the optionee to
purchase shares upon exercise of any option; (viii) whether shares issued upon
the exercise of an option are subject to certain restrictions or to repurchase
by the Company; (ix) the fair market value of shares of the Common Stock; and
(xii) any other terms and conditions of the option not otherwise inconsistent
with the provisions of the Plan. The Committee is also authorized to interpret
the terms of the Plan and to adopt regulations relating to the Plan that are not
inconsistent with the terms of the Plan. The determination of the Committee with
respect to such matters is final and conclusive.
Terms and Conditions of Options
Options granted under the Plan are subject to, among other things, the
following terms and conditions:
(a) The option price of an option shall be fixed by the Committee in
the case of grants to participants other than Non-Employee Directors and the
full Board with respect to grants to Non-Employee Directors, except that in the
case of an ISO, the option price cannot be less than the fair market value of
the shares subject to the option on the date it is granted (110% of such fair
market value if the optionee owns or is deemed to own more than 10% of the
voting power of the Company's shares).
(b) Options are not transferable during the optionee's lifetime, and
during his or her lifetime may only be exercised by the optionee.
(c) Options may be granted for terms determined by the Committee in the
case of grants to participants other than Non-Employee Directors and the full
Board with respect to grants to Non-Employee Directors, except that the term of
an ISO may not exceed 10 years (five years if the optionee owns or is deemed to
own more than 10% of the voting power of the Company's shares).
(d) Appropriate arrangements may be specified with respect to any
federal, state, local or other tax withholding which is required in connection
with the options.
(e) The maximum number of shares for which options may be granted to
any person in any fiscal year is 300,000. The aggregate fair market value of
shares with respect to which ISOs may be granted to an employee which are
exercisable for the first time during any calendar year may not exceed $100,000.
Any option granted in excess of such amount is treated as an NQSO.
(f) No fractional shares of Common Stock may be exercised or acquired
under the Plan.
The Plan previously provided that every Non-Employee Director be
granted an option to purchase 250 shares of Common Stock immediately following
every meeting of the Board of Directors which he or she attended. In addition,
the Plan provided that immediately following each annual meeting of shareholders
at which a Non-Employee Director was elected, such Non-Employee Director was to
be granted an option to purchase 10,000 shares of Common Stock. The Committee
did not have any discretion with respect to the selection of Non-Employee
Directors to receive option grants, or the amount, price, terms or timing with
respect to such grants. The exercise price of all such options granted to
Non-Employee Directors was required to be equal to the fair market value of the
shares of Common Stock subject to the grant on the date of grant, the term of
such options was to be 10 years, and the options were to be subject to a
five-year vesting period from the date of grant (with 20% of the grant vesting
on the first anniversary of the date of grant and 20% vesting on each subsequent
anniversary for the following four years). In addition, the Plan provided for
immediate vesting if a Non-Employee Director was terminated as a director within
36 months following a change of control of the Company, and such option grants
were to expire within 30 days after an individual ceased to serve as a Director
of the Company or were to terminate immediately if a Director was terminated for
cause.
These provisions constituted "formula award" guidelines and were
included in the Plan in order to ensure that the Plan qualified for granting
options to Non-Employee Directors which were exempt under the former Section 16
short-swing profit rules and regulations. Under the Final Section 16 Rules,
awards to Non-Employee Directors are no longer subject to the "formula plan"
restrictions of the old Section 16 rules. Therefore, the Plan, as amended,
provides for grants to Non-Employee Directors, the amount, terms and conditions
of which are to be determined by the entire Board of Directors.
Adjustments in the Event of Capital Changes
In the event the number of shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares
of stock or other securities of the Company through reorganization, merger or
consolidation, recapitalization, stock split, split-up, combination, exchange of
shares, declaration of any Common Stock dividends or similar events, the number
and kind of shares of stock and the option price per share subject to the
unexercised portion of any option, the number and kind of shares of stock
subject to the Plan and the maximum number of shares which may be granted to a
person in any fiscal year is to be appropriately adjusted by the Board of
Directors.
Duration and Amendment of the Plan
No ISO may be granted under the Plan after February 27, 2006. The Board
of Directors may amend the Plan from time to time, except that without
shareholder approval no amendment may increase the maximum number of shares with
respect to which options may be granted under the Plan (except in the case of
the events for which adjustment authority has been granted to the Board of
Directors as described above), materially increase the benefits accruing to
optionees under the Plan, change the eligibility requirements for optionees or
make any change for which applicable law requires shareholder approval.
Federal Income Tax Treatment
The following is a general summary of the federal income tax
consequences under the current tax law of NQSOs and ISOs. It does not purport to
cover all the special rules, or the state or local income or other tax
consequences inherent in the ownership and exercise of stock options and the
ownership and disposition of the underlying shares. An optionee will not
recognize taxable income for federal income tax purposes upon the grant of an
NQSO or ISO.
Upon the exercise of an NQSO, the optionee will recognize ordinary
income in an amount equal to the excess, if any, of the fair market value of the
shares acquired on the date of exercise over the option price thereof, and the
Company will generally be entitled to a deduction for such amount at that time.
If the optionee later sells shares acquired pursuant to the exercise of an NQSO,
he or she will recognize long-term or short-term capital gain or loss, depending
on the period for which the shares were held. Long-term capital gain is
generally subject to more favorable tax treatment than ordinary income or
short-term capital gain.
Upon the exercise of an ISO, the optionee will not recognize taxable
income. If the optionee disposes of the shares acquired pursuant to the exercise
of an ISO more than two years after the date of grant and more than one year
after the transfer of the shares to him or her, the optionee will recognize
long-term capital gain or loss and the Company will not be entitled to a
deduction. However, if the optionee disposes of such shares within the required
holding period, all or a portion of the gain will be treated as ordinary income
and the Company will generally be entitled to deduct such amount.
In addition to the federal income tax consequences described above, an
optionee may be subject to the alternative minimum tax.
The affirmative vote of a majority of the shares represented in person
or by proxy at the Annual Meeting is required for approval of the above
described amendments to the Plan. Unless otherwise specified, the proxies
solicited hereby will be voted in favor of the above proposal.
The Board of Directors recommends that shareholders vote FOR the
amendments to the Plan.
Matter 3. Appointment of Auditors
The Company's independent auditors for the fiscal year ended December
31, 1996, were Deloitte & Touche LLP, Milwaukee, Wisconsin. The Board of
Directors of the Company has recommended that Deloitte & Touche LLP be
reappointed to perform the audit of the Company's financial statements for the
fiscal year ending December 31, 1997. A representative of Deloitte & Touche LLP
is expected to be present at the meeting with an opportunity to make a statement
if so desired and to answer appropriate questions with respect to that firm's
audit of the Company's financial statements and records for the fiscal year
ended December 31, 1996.
The affirmative vote of a majority of the shares represented, in person
or by proxy, at the Annual Meeting is required for approval of the appointment
of Deloitte & Touche LLP as the Company's independent auditors. Although
shareholders are not legally required to approve the appointment of the
Company's auditors, the Company nonetheless has traditionally permitted
shareholders to approve the appointment. In the event this proposal is not
approved, the Board of Directors will re-evaluate its recommendation. Unless
otherwise specified, the shares of Common Stock represented by the proxies
solicited hereby will be voted in favor of the above proposal.
The Board of Directors recommends that shareholders vote FOR the
proposal to reappoint Deloitte & Touche LLP as the Company's independent
auditors.
Meetings of the Board of Directors and Committees of the Board of Directors
The Board of Directors held four regular meetings during fiscal 1996.
During fiscal 1996, each director attended at least 75% of the meetings of the
Board of Directors and committees of the Board of Directors ("Committees") held
during his or her tenure as a director or Committee member. The Board of
Directors has standing Compensation and Audit Committees.
The Compensation Committee evaluates the performance of the Company's
executive officers, approves executive officer compensation and reviews
management's recommendations as to the compensation of other key personnel, acts
as the nominating committee for officers and directors and makes recommendations
to the Board of Directors regarding the types, methods and levels of director
compensation, administers the compensation plans for the officers, directors and
key employees, and discharges certain other responsibilities of the Board of
Directors when so instructed by the Board. The members of the Compensation
Committee are Messrs. Levy (Chairman) and Seidman, and Ms. Shackelford. The
Compensation Committee held one meeting during the year ended December 31, 1996.
The Audit Committee reviews the scope and timing of the audit of the
Company's financial statements by the Company's independent public accountants
and reviews with these accountants the Company's management policies and
procedures with respect to auditing and accounting controls. The Audit Committee
also reviews with the independent accountants the financial statements,
auditor's reports and management letter of the independent accountants. The
Audit Committee reviews and evaluates Conflict of Interest statements and
discharges certain other responsibilities of the Board of Directors when so
instructed by the Board of Directors. The members of the Audit Committee are
Messrs. Levy (Chairman) and Seidman, and Ms. Shackelford. The Audit Committee
held one meeting during the fiscal year ended December 31, 1996.
Compensation of Directors
Directors who are officers or employees of the Company receive no
compensation for service as members of the Board of Directors of the Company or
for service on committees of the Board of Directors. A director who is not an
officer or employee of the Company receives an annual fee of $12,000 for service
on the Board of Directors of the Company, plus $1,000 for attendance at Board of
Director meetings. In addition, each outside director is granted 10,000 stock
options, at fair market value, upon election to each new three-year term and 250
stock options for attendance at Board of Director meetings. The options granted
may be exercised 20% per year and expire 10 years from the date of the award. If
the proposal to amend the Plan is approved by shareholders, the mandatory
formula awards to outside directors will be eliminated and the entire Board
shall determine the amount, timing and terms of any options granted to outside
directors in the future.
Compensation of Executive Officers
The following table sets forth in summary form all compensation, as
defined in regulations of the Commission, paid or accrued by the Company and its
subsidiaries during each of the three years ended December 31, 1996, to the
Company's Chief Executive Officer and the next four highest paid executive
officers whose total annual salary and bonus for the fiscal year ended December
31, 1996, exceeded $100,000.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation
Compensation(3) Number of Shares All Other
Name and Principal Position Year Salary(1) Bonus(2) Subject to Options Compensation(4)
<S> <C> <C> <C> <C> <C>
George D. Dalton 1996 $560,000 $ 90,000 61,763 $ 11,145
Chairman of the Board, 1995 525,000 90,000 61,763 11,145
Chief Executive Officer 1994 460,000 100,000 65,813 10,500
Leslie M. Muma 1996 500,000 50,000 53,663 11,145
Vice Chairman of the Board, 1995 475,000 80,000 53,663 11,145
President, Chief Operating 1994 410,000 90,000 57,039 10,500
Officer
Kenneth R. Jensen 1996 395,000 75,000 41,175 11,145
Senior Executive Vice 1995 370,000 60,000 41,175 11,145
President, Chief Financial 1994 325,000 80,000 43,875 10,500
Officer and Treasurer
Donald F. Dillon(5) 1996 211,000 150,000 27,759 11,145
Vice Chairman of the Board, 1995 191,800 200,000 -- --
Chairman and President of
Information Technology, Inc.
Dean C. Schmelzer 1996 240,000 111,000 12,825 11,145
Executive Vice President, 1995 228,000 41,300 1,175 11,145
Marketing and Sales 1994 213,000 64,140 2,250 10,500
</TABLE>
(1) Includes compensation earned and deferred by the named executive
officers in each of the fiscal years indicated.
(2) Bonus payments are discretionary.
(3) Perquisites provided to the named executive officers by the Company did
not exceed the lesser of $50,000 or 10% of each named executive
officer's total annual salary and bonus during the fiscal years
indicated, and accordingly, are not included.
(4) Amounts shown in this column represent the Company's contributions on
behalf of the named executive officers under the Company's 401(k) Plan
for the fiscal years ended December 31, 1994 and 1995. The amount shown
for fiscal 1996 is estimated.
(5) Information Technology, Inc. was acquired by the Company on May 17,
1995. Amounts shown for 1995 represent annualized salary amounts.
The following table sets forth certain information concerning
individual grants of stock options to those individuals listed in the Summary
Compensation Table during the fiscal year ended December 31, 1996.
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
<CAPTION>
% of Total Potential Realizable
Options Value at Assumed Rates
Granted to Exercise of Stock Price
Options Employees in Price Expiration Appreciation
Name Granted(1) Fiscal Year(2) ($/Sh) Date for Option Term(3)
5% 10%
<S> <C> <C> <C> <C> <C> <C>
George D. Dalton 61,763 18.51% $30.50 2/27/06 $1,184,694 $3,002,247
Leslie M. Muma 53,663 16.08 30.50 2/27/06 1,029,325 2,608,513
Kenneth R. Jensen 41,175 12.34 30.50 2/27/06 789,789 2,001,482
Donald F. Dillon 27,759 8.32 30.50 2/27/06 532,453 1,349,341
Dean C. Schmelzer 12,825 3.84 30.50 2/27/06 246,000 623,412
</TABLE>
(1) The Company's Stock Option Plan provides for grants of Common Stock to
employees and directors. In general, the options are granted with an
option price not less than the fair market value of the underlying shares
on the date of grant, with 20% of the options becoming exercisable
annually and expiring five to 10 years from the date of the grant.
(2) Options to purchase 333,700 shares of Common Stock were granted to
employees under the Company's stock option plan during the fiscal year
ended December 31, 1996.
(3) Amount shown represents the potential realizable value, net of the option
exercise price, assuming that the underlying market price of the Common
Stock appreciates in value from the date of grant to the end of the
option term at annualized rates of 5% and 10%. These amounts represent
certain assumed rates of appreciation only. Actual gains, if any, on
stock option exercises are dependent upon the future performance of the
Common Stock and overall market conditions. There can be no assurance
that the amounts reflected in this table will be achieved.
The following table sets forth certain information concerning the
exercise of stock options granted under the Company's stock option plans by each
of the executive officers named in the Summary Compensation Table during the
fiscal year ended December 31, 1996.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Value of
<CAPTION>
Number of Unexercised
Number of Unexercised In-the-Money
Shares Options Options at
Acquired Value at Fiscal Year End Fiscal Year End(1)
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C> <C>
George D. Dalton 0 0 190,958 124,943 $3,396,770 $1,525,050
Leslie M. Muma 0 0 219,307 108,490 4,385,502 1,323,903
Kenneth R. Jensen 0 0 168,480 83,295 3,368,996 1,016,693
Donald F. Dillon 0 0 5,552 22,207 34,699 138,795
Dean C. Schmelzer 0 0 52,632 12,677 1,061,176 104,546
</TABLE>
(1) The value of Unexercised In-the-Money Options is based upon the
difference between the fair market value of the stock options and the
exercise price of the options at December 31, 1996.
<PAGE>
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors is responsible for
establishing compensation for the Company's Chief Executive Officer, President
and Chief Operating Officer and its Senior Executive Vice President and Chief
Financial Officer (the Executives). In so doing, the Committee has developed and
implemented compensation policies and programs which seek to enhance the
long-term profitability of the Company, thereby contributing to the value of
shareholders' investment.
In addition to annual cash compensation, the Committee establishes
criteria pursuant to which the Executives may also qualify for the award of
options to acquire the Company's common stock at a price equal to market value
on the date of grant. Awards are based 75% on growth in earnings per share (EPS)
and 25% on revenue growth. If the revenue growth percentage exceeds that for
EPS, the EPS growth percentage will replace the revenue growth percentage in
determining awards. The range of growth used to calculate awards is from 10% to
25% and the maximum annual award to any executive is 300,000 shares.
Mr. Dalton's 1996 Compensation. Compensation for the Chief Executive
Officer aligns with the philosophy and practices discussed above for the other
senior executive officers. At the beginning of each year, the Compensation
Committee sets a target bonus amount for the Chief Executive Officer. For 1996,
as in 1995, Mr. Dalton's performance goals were established based on strategic
and financial measurements, including a target level of earnings per share and
implementation of the Company's acquisition and internal growth strategies. Of
these factors, the Company's target level of earnings per share carried a
significantly greater weight than the aggregate weight assigned to the remaining
factors. Based on the evaluation, the Compensation Committee awarded an
incentive payment of 16% of Mr. Dalton's compensation level for 1996.
The Compensation Committee awarded Mr. Dalton stock options in
accordance with the criteria described above for other senior executives.
Based upon the Company's performance over the past five years when
compared to companies comprising the S&P 500 and its S&P industry group, it
appears that the level of executive compensation is commensurate with that which
is being paid to senior executives by other companies in similar businesses.
Committee Members: Gerald J. Levy, Chairman
L. William Seidman
Thekla R. Shackelford
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
FISERV, INC., S&P 500 INDEX AND
S&P COMPUTER SOFTWARE AND SERVICES INDEX
(Assumes initial investment of $100 and reinvestment of
dividends.)
COMPUTER
MEASUREMENT PERIOD S&P SOFTWARE &
(FISCAL YEAR COVERED) FISERV, INC. 500 INDEX SERVICES INDEX
- --------------------- ------------ --------- --------------
MEASUREMENT PT-12/31/91 $100 $100 $100
FYE 12/31/92 $100 $108 $118
FYE 12/31/93 $115 $118 $151
FYE 12/31/94 $128 $120 $179
FYE 12/31/95 $179 $165 $251
FYE 12/31/96 $219 $203 $390
Assume $100 invested on December 31, 1991, in each of Company Common
Stock, S&P 500 Index and Industry Index and the reinvestment of all dividends
paid during the five-year period ending December 31, 1996.
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors and persons owning in excess of 10% of the shares of the Common Stock
outstanding to file reports of ownership and changes in ownership with the
Commission. Officers, directors and 10% shareholders are also required to
furnish the Company with copies of all Section 16(a) forms they file.
Based upon a review of the information furnished to the Company, the
Company believes that during the fiscal year ended December 31, 1996, its
officers and directors complied with all applicable Section 16(a) filing
requirements.
Shareholder Proposals for the 1998 Annual Meeting
Any proposal which a shareholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of shareholders,
which is scheduled to be held in March 1998, must be received at the corporate
offices of the Company, 255 Fiserv Drive, Brookfield, Wisconsin 53045,
Attention: Charles W. Sprague, Executive Vice President, General Counsel and
Secretary, no later than October 21, 1997. If such proposal is in compliance
with Rule 14a-8 under the Exchange Act, it will be included in the proxy
statement and set forth on the form of proxy issued for such annual meeting of
shareholders. It is urged that any such proposals be sent certified mail, return
receipt requested.
Annual Report
The Annual Report of the Company for the fiscal year ended December 31,
1996, will be mailed to each shareholder on or about February 17, 1997. The
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996, filed by the Company with the SEC, will be furnished without charge to any
person requesting a copy thereof in writing and stating such person is a
beneficial holder of shares of Common Stock of the Company on the record date
for the Annual Meeting.
Requests and inquiries should be addressed to Charles W. Sprague.
By Order of the Board of Directors,
/S/ CHARLES W. SPRAGUE
Charles W. Sprague
Secretary
Brookfield, Wisconsin
February 17, 1997
APPENDIX A
Fiserv, Inc.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints George D. Dalton, Leslie M. Muma and Charles W.
Sprague as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated below, all the shares of
Common Stock of Fiserv, Inc. (the "Corporation") held of record by the
undersigned on February 3, 1997, at the Annual Meeting of Shareholders to be
held on March 20, 1997, or any adjournment thereof.
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 FOR PROPOSALS 1, 2,and 3.
FISERV, INC. ANNUAL MEETING OF SHAREHOLDERS
1. ELECTION OF TWO DIRECTORS TO SERVE FOR A THREE-YEAR TERM EXPIRING IN 2000:
1-G.D. Dalton, 2-L.W. Seidman
FOR WITHHOLD
(Instructions: To withhold authority to vote for any Individual nominee,
write the number(s)of the nominee, as set forth next to the names above, in
the box provided to the right.)
2. PROPOSAL TO AMEND the Fiserv, Inc. Non-Qualified Stock Option
Plan, in certain respects:
FOR AGAINST ABSTAIN
3. PROPOSAL TO APPROVE THE REAPPOINTMENT OF Deloitte & Touche LLP, Milwaukee,
Wisconsin, as the Independent auditors of the Corporation and subsidiaries
for 1997:
FOR AGAINST ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
DATE:__________________ NO. OF SHARES:________________
- ----------------------------
Signature(s)
Signature(s) in Box
PLEASE SIGN exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE CHECK LOWER BOX IF APPROPRIATE
YES, I WILL ATTEND THE ANNUAL
MEETING ON MARCH 20, 1997
FISERV, INC.
STOCK OPTION PLAN
(as amended through February 11, 1997)
Section 1. Purpose. The purpose of the Fiserv, Inc. Stock Option Plan
(the "Plan") is to promote the interest of Fiserv, Inc. (the "Company") and its
Subsidiaries (the Company and each such Subsidiary being herein each referred to
as a "Fiserv Group Company") by (a) providing an incentive to employees, and to
directors who are not employees, of the Fiserv Group Companies which will
attract, retain and motivate persons who are able to make important
contributions to the Company's growth, profitability and long-term success, and
(b) furthering the identity of interests of the Optionees with those of the
Company's shareholders through stock ownership opportunities. Options to be
issued under the Plan may be "incentive stock options" as defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), or "non-qualified
stock options" ("NQSOs"), which do not qualify as "incentive stock options"
("ISOs"), but the Company makes no representation or warranty as to the
qualification of any Option as an incentive stock option under the Code.
Section 2. Definitions. For purposes of this Plan, the following
terms used herein shall have the following meanings,
unless a different meaning is clearly required by the
context.
2.1 "Board of Directors" shall mean the Board of Directors of the
Company.
2.2 "Committee" shall mean the committee of the Board of Directors
referred to in Section 5 hereof.
2.3 "Common Stock" shall mean the Common Stock, $.01 par value,
of the Company.
2.4 "Non-Employee Director" shall mean a non-employee director, as
defined in Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which currently defines a
non-employee director as a director who (i) is not currently
an officer or otherwise employed by the Company, or a parent
or subsidiary of the Company, (ii) does not receive
compensation for consulting services or in any other capacity
from the Company or its subsidiaries in excess of $60,000 in
any one year, and (iii) does not possess an interest in and is
not engaged in business relationships required to be reported
under Items 404(a) or 404(b) of Regulation S-K promulgated
under the Exchange Act.
2.5 "Option" shall mean any option granted to a person pursuant
to this Plan.
2.6 "Optionee" shall mean a person to whom an Option is granted
under this Plan.
2.7 "Parent" shall mean a "parent corporation" as defined in
Section 424(e) of the Code.
2.8 "Subsidiary" shall mean a "subsidiary corporation" as defined
in Section 424(f) of the Code.
Section 3. Eligible Optionees.
3.1 Options may be granted hereunder to any employee of any Fiserv
Group Company and to any Non-Employee Director. The Committee
shall have the sole authority to select employees and
Non-Employee Directors to whom Options are to be granted
hereunder.
Section 4. Common Stock Subject to the Plan; Special Limitations.
4.1 The total number of shares of Common Stock for which Options
may be granted under this Plan shall not exceed in the
aggregate 4,100,000 shares of Common Stock. The total number
of shares of Common Stock for which Options may be granted
under this Plan in any one fiscal year of the Company to any
one person shall not exceed in the aggregate 300,000 shares of
Common Stock.
4.2 The shares of Common Stock that may be subject to Options
granted under this Plan may be either authorized and unissued
shares or shares reacquired at any time and now or hereafter
held as treasury stock as the Board of Directors may
determine. In the event that any outstanding Option expires or
is canceled or terminated for any reason, the shares allocable
to the unexercised portion of such Option may again be subject
to an Option granted under this Plan.
Section 5. Administration of the Plan.
5.1 The Plan shall be administered by a committee of the Board of
Directors (the "Committee") and shall consist of not less than
two directors. All members of the Committee shall be both
Non-Employee Directors and "outside directors" within the
meaning of Section 162(m) of the Code. The Committee shall be
appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors. A majority of the members
of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a
quorum is present and the acts approved in writing by all
members without a meeting shall be the acts of the Committee.
5.2 The Committee (the Board of Directors with respect to grants
to Non-Employee Directors) shall have the sole authority and
discretion to grant Options under this Plan and to determine
the terms and conditions of any such Option, including,
without limitation, the sole authority and discretion (i) to
select the persons who are to be granted Options hereunder,
(ii) to determine the times when Options shall be granted,
(iii) to determine whether an Option granted to an employee
will be an ISO or a NQSO, (iv) to establish the number of
shares of Common Stock that may be issued under each Option
and to establish the option price therefor, (v) to determine
the term of each Option, (vi) to determine the time and the
conditions subject to which Options may be exercised in whole
or in part, (vii) to determine the form of consideration that
may be used to purchase shares of Common Stock upon exercise
of any Option (including the circumstances under which the
Company's issued and outstanding shares of Common Stock may be
used by an Optionee to exercise an Option), (viii) to
determine whether to restrict the sale or other disposition of
the shares of Common Stock acquired upon the exercise of an
option (including the circumstances under which shares of
Common Stock acquired upon exercise of any Option may be
subject to repurchase by the Company) and, if so, whether to
waive any such restriction, (ix) to accelerate the time when
outstanding Options may be exercised, (x) to determine the
amount, if any, necessary to satisfy any Fiserv Group
Company's obligation to withhold taxes or other amounts, (xi)
to determine the fair market value of a share of Common Stock,
(xii) with the consent of the Optionee, to cancel or modify an
Option, provided, however, that such Option as modified would
have been permitted to have been granted under the Plan on the
date of grant of the original Option and provided, further,
however, that in the case of a modification (within the
meaning of Section 424(h) of the Code) of an ISO, such Option
as modified would be permitted to be granted on the date of
such modification under the terms of the Plan, and (xiii) to
establish any other terms and conditions applicable to any
Option and to make all other determinations relating to the
Plan and Options not inconsistent with the provisions of this
Plan.
5.3 The Committee shall be authorized to interpret the Plan and
may, from time to time, adopt such rules and regulations, not
inconsistent with the provisions of the Plan, as it may deem
advisable to carry out the purpose of this Plan.
5.4 The interpretation and construction by the Committee of any
provision of the Plan, any Option granted hereunder or any
option agreement evidencing any such Option shall be final and
conclusive upon all parties. Any controversy or claim arising
out of or relating to the Plan or any Option shall be
determined unilaterally by the Committee, whose determination
shall be final and conclusive upon all parties.
5.5 Members of the Committee may vote on any matter affecting the
administration of the Plan or any agreement or the granting of
Options under the Plan.
5.6 All expenses and liabilities incurred by the Board of
Directors (or the Committee) in the administration of the Plan
shall be borne by the Company. The Board of Directors (or the
Committee) may employ attorneys, consultants, accountants or
other persons in connection with the administration of the
Plan. The Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of
any such persons. No member or former member of the Board of
Directors (or the Committee) shall be liable for any action,
determination or interpretation taken or made in good faith
with respect to the Plan or any Option or agreement hereunder.
Section 6. Terms and Conditions of Options.
Subject to the Plan, the terms and conditions of each Option granted
under the Plan shall be specified by the Committee (the Board of Directors with
respect to grants to Non-Employee Directors) and shall be set forth in an option
agreement between the Company and the Optionee in such form as the Committee
shall approve. The terms and conditions of any Option granted hereunder need not
be identical to those of any other Option granted hereunder.
The terms and conditions of each Option shall include the following:
(a) The option price shall be fixed by the Committee, provided,
however, that in the case of an ISO, the option price may not
be less than the fair market value of the shares of Common
Stock subject to the Option on the date the Option is granted,
and provided, further, however, that if at the time an ISO is
granted, the Optionee owns (or is deemed to own under Section
424(d)of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company,
any of its Subsidiaries or a Parent, the option price of such
ISO shall not be less than 110% of the fair market value of
the Common Stock subject to such ISO on the date of grant.
(b) Options shall not be transferable otherwise than by will or
the laws of descent and distributions, and during an
Optionee's lifetime, an option shall be exercisable only by
the Optionee or the Optionee's legal guardian.
(c) The Committee shall fix the term of all Options granted
pursuant to the Plan (including the date on which such Option
shall expire and the conditions under which it terminates
earlier),provided, however, that the term of an ISO may not
exceed 10 years from the date such Option is granted, and
provided, further, however, that if at the time an ISO is
granted, the Optionee owns (or is deemed to own under Section
424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the
Company, any of its Subsidiaries or a Parent, the term of such
ISO may not exceed five years from the date of grant. Each
Option shall be exercisable in such amount or amounts, under
such conditions, and at such times or intervals or in such
installments as shall be determined by the Committee. The
Committee may, in its sole discretion, establish a vesting
provision for any Option relating to the time or the
circumstances when the Option may be exercised by the
Optionee.
(d) In the event that any Fiserv Group Company is required to
withhold any Federal, state or local taxes or other amounts
in respect of any income realized by
the Optionee in respect of an Option granted hereunder, in
respect of any shares acquired pursuant to the exercise of an
Option or in respect of the disposition of an Option or any
shares acquired pursuant to the exercise of an Option, the
Company may deduct (or require the Fiserv Group Company to
deduct) from any payments of any kind otherwise due to such
Optionee cash or with the consent of the Committee (in the
stock option contract or otherwise) shares of the Company's
Common Stock the aggregate amount of such Federal, state or
local taxes and other amounts required to be so withheld.
Alternatively, the Company may require such Optionee to pay to
the Company in cash, promptly on demand, or make other
arrangements satisfactory to the Company regarding payment to
the Company of, the aggregate amount of any such taxes and
other amounts.
(e) The aggregate fair market value (determined at the time the
Option is granted) of the shares of Common Stock for which an
eligible employee may be granted ISOs under the Plan or any
other plan of the Company, any of its Subsidiaries or a Parent
which are exercisable for the first time by such employee
during any calendar year shall not exceed $100,000. Such
limitation shall be applied by taking ISOs into account in the
order in which they were granted. Any Option (or portion
thereof) granted in excess of such amount shall be treated as
an NQSO.
(f) In no case may a fraction of a share be exercised or acquired
pursuant to the Plan.
Section 7. Adjustments. In the event that, after the adoption of the
Plan by the Board of Directors, the outstanding shares of the Company's Common
Stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
through reorganization, merger or consolidation, recapitalization, spin-off,
stock split, split-up, combination, exchange of shares, declaration of any
dividends payable in Common Stock or the like, the number and kind of shares of
stock and the price per share subject to the unexercised portion of any
outstanding Option, the number and kind of shares of Stock subject to the Plan
and the maximum number of shares which may be granted to a person in any fiscal
year shall be appropriately adjusted by the Board of Directors, and such
adjustment shall be effective and binding for all purposes of this Plan. Such
adjustment may provide for the elimination of fractional shares which might
otherwise be subject to Options without payment therefor.
Section 8. Effect of the Plan on Employment Relationship. Neither this
Plan nor any Option granted hereunder shall be construed as conferring upon any
Optionee any right to continue in the employ of any Fiserv Group Company or
limit in any respect any right of any Fiserv Group Company to terminate such
Optionee's employment at any time without liability, or to continue as a
Non-Employee Director.
Section 9. Amendment of the Plan. The Board of Directors may amend the
Plan from time to time as it deems desirable, provided, however, that, without
the approval of the holders of a majority of the shares of Common Stock of the
Company present, or represented, and entitled to vote at any meeting duly held
in accordance with the applicable laws of the State of Wisconsin, the Board of
Directors may not (a) increase the maximum number of shares of Common Stock for
which Options may be granted under this Plan (other than increases due to
adjustment in accordance with Section 7 hereof), (b) materially increase the
benefits accruing to participants under the Plan, (c) change the eligibility
requirements to receive Options hereunder or (d) make any change for which
applicable law requires shareholder approval.
Section 10. Termination of the Plan. The Board of Directors may
terminate the Plan at any time. No Option may be granted hereunder after
termination of the Plan. No ISO may be granted under the Plan more than 10 years
after the date on which the Plan was adopted. The termination or amendment of
the Plan shall not alter or impair any rights or obligations under any Option
theretofore granted under the Plan, without the consent of the Optionee.
Section 11. Effective Date of the Plan. This Plan (as amended and
restated) will become effective on the date on which it is approved by the Board
of Directors. This Plan (as amended and restated) is subject to approval by the
holders of the majority of the shares of Common Stock of the Company present, or
represented, and entitled to vote at the next meeting duly held in accordance
with the applicable laws of the State of Wisconsin. No Option granted hereunder
may be exercised prior to such approval, provided, however, that the date of
grant of any Option shall be determined as if the Plan had not been subject to
such approval. Notwithstanding the foregoing, if the Plan (as amended and
restated) is not approved by a vote of shareholders within 12 months after it is
adopted by the Board of Directors, the amendment shall be null and void, the
Plan as in effect prior to such amendment and restatement shall continue in full
force and effect and any Options granted pursuant to such amendment and
restatement shall terminate.
Section 12. Governing Law. This Plan, the Options and all related
matters shall be governed by, and construed in accordance with, the laws of the
State of Wisconsin, without regard to choice of law provisions. Neither the Plan
nor any agreement pursuant to the Plan shall be construed or interpreted with
any presumption against any Fiserv Group Company by reason of the Fiserv Group
Company having drafted or adopted the Plan or agreement. The invalidity,
illegality or unenforceability of any provision in the Plan or in any agreement
pursuant to the Plan shall not affect the validity, legality or enforceability
of any other provision, all of which shall be valid, legal and enforceable to
the fullest extent permitted by applicable law.
