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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 Section 240.14a-11(c) or Section 240.14a-12
FIRST DATA CORPORATION
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(Name of Registrant as Specified In Its Charter)
FIRST DATA CORPORATION
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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.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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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
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF FIRST DATA CORP APPEARS HERE]
FIRST DATA CORPORATION
401 HACKENSACK AVENUE
HACKENSACK, NEW JERSEY 07601
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1998
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of First Data
Corporation, a Delaware corporation (the "Company"), will be held at the
Company's corporate offices, at 5660 New Northside Drive, Atlanta, Georgia
30328 on Wednesday, May 13, 1998, at 11:30 a.m. (E.D.T.), for the following
purposes:
1. The election of three directors;
2. The approval of an increase in the number of shares issuable under the
Company's 1992 Long-Term Incentive Plan by 22,000,000 shares of the
Company's Common Stock;
3. The ratification of the selection of Ernst & Young LLP as independent
auditors of the Company for 1998; and
4. The transaction of such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Stockholders of record at the close of business on March 16, 1998 (the
"Record Date") will be entitled to vote at the meeting and any adjournment or
postponement thereof.
You are cordially invited to attend the meeting, but whether or not you
expect to attend in person, you are urged to mark, date and sign the enclosed
proxy and return it in the enclosed prepaid envelope.
By Order of the Board of Directors
[SIGNATURE OF MICHAEL T. WHEALY]
Michael T. Whealy
Corporate Secretary
March 26, 1998
YOUR VOTE IS IMPORTANT
WHETHER YOU OWN A FEW OR MANY SHARES OF COMMON STOCK, YOU ARE URGED TO MARK,
DATE, SIGN AND RETURN YOUR PROXY PROMPTLY SO THAT YOUR SHARES MAY BE VOTED IN
ACCORDANCE WITH YOUR WISHES AND SO THAT THE PRESENCE OF A QUORUM MAY BE
ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY WILL AID THE COMPANY IN
REDUCING THE EXPENSE OF PROXY SOLICITATION.
<PAGE>
FIRST DATA CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished to the stockholders of First Data
Corporation ("FDC" or the "Company") in connection with the solicitation of
proxies by and on behalf of the Board of Directors of the Company to be voted
at the Annual Meeting of Stockholders to be held at 11:30 a.m., (E.D.T.), on
Wednesday, May 13, 1998, and any adjournment or postponement thereof. The
meeting will be held at the Company's corporate offices, at 5660 New Northside
Drive, Atlanta, Georgia 30328. A copy of the notice of the meeting is
attached. This Proxy Statement and the accompanying form of proxy are first
being mailed on or about March 26, 1998 to stockholders of record as of March
16, 1998 (the "Record Date"). The only voting securities of the Company are
shares of the Company's Common Stock, $.01 par value per share (the "Common
Stock"), of which there were 447,854,978 shares outstanding as of the Record
Date (excluding treasury stock).
The Company's Annual Report to Stockholders, which contains financial
statements for the year ended December 31, 1997, accompanies this Proxy
Statement. A copy of the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission may be obtained without charge from the
Company by writing to Investor Relations, First Data Corporation, 5660 New
Northside Drive, Suite 1400, Atlanta, Georgia 30328.
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TABLE OF CONTENTS
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PAGE
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The Proxy Process and Shareholder Voting.................................. 2
Frequently Asked Questions................................................ 2
Proposals Submitted for Shareholder Vote.................................. 5
Proposal 1 --Election of Directors...................................... 5
Proposal 2 --The approval of an increase in the number of shares
issuable under the Company's 1992 Long-Term Incentive Plan
by 22,000,000 shares of the Company's Common Stock......... 5
Proposal 3 --The ratification of the selection of Ernst & Young LLP as
independent auditors of the Company for 1998............... 8
The Board of Directors.................................................... 9
Governance of the Company................................................. 11
Committees of the Board of Directors...................................... 11
Common Stock Ownership of Directors and Executive Officers................ 12
Compensation of Directors................................................. 12
Executive Compensation Report by the Compensation and Benefits Committee.. 13
Summary Compensation Table................................................ 16
Option Grants in 1997..................................................... 17
Aggregated Option Exercises in 1997 and Year-End 1997 Option Values....... 18
Long-Term Incentive Plans--Awards in 1997................................. 18
Retirement Plans.......................................................... 19
Performance Graph......................................................... 20
Certain Transactions and Other Matters.................................... 21
Section 16(a) Beneficial Ownership Reporting Compliance................... 22
Principal Holders of Common Stock......................................... 22
Exhibit A--1992 Long-Term Incentive Plan (as amended subject to
shareholder approval)
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THE PROXY PROCESS AND SHAREHOLDER VOTING
The proxy process is the means by which corporate shareholders can exercise
their rights to vote for the election of directors and other strategic
corporate proposals. This PROXY STATEMENT provides notice of a scheduled
shareholder meeting, describes the proposals presented for shareholder action
and includes information required to be disclosed to shareholders. The
accompanying PROXY CARD provides shareholders with a simple means to vote on
the described proposals without having to attend the shareholder meeting in
person. By executing the Proxy Card, you authorize Henry C. Duques and Michael
T. Whealy to act as your PROXIES to vote your shares as specified.
The form and content of the proxy materials, the proxy process and
shareholder voting requirements all are subject to extensive state and federal
regulation intended to assure that shareholders are provided a meaningful
voice in the governance and direction of the corporations in which they own
stock.
The proxy voting mechanism also is vitally important to the Company. In
order for the Company to obtain the necessary shareholder approval of
proposals, a "QUORUM" of shareholders (a majority of the issued and
outstanding shares entitled to vote, excluding treasury stock) must be
represented at the meeting in person or by proxy. Since few shareholders can
spend the time or money to attend shareholder meetings in person, voting by
proxy is necessary to obtain a quorum and complete the shareholder vote.
It is important that you vote your shares to assure a quorum is obtained so
corporate business can be transacted. If a quorum is not obtained, the Company
must postpone the meeting and solicit additional proxies; this is an expensive
and time-consuming process that is not in the best interest of the Company or
its shareholders.
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FREQUENTLY ASKED QUESTIONS ABOUT THE PROXY PROCESS
Q1: WHY DID I RECEIVE THESE MATERIALS?
A: Shareholders of the Company as of the close of business on the March 16,
1998 "RECORD DATE" are entitled to vote at the Company's Annual Meeting.
The Company is required by law to distribute these proxy materials to all
shareholders as of the Record Date.
Q2: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE SET OF MATERIALS?
A: This means you own shares of the Company that are registered differently.
For example, you may own some shares directly as a "REGISTERED HOLDER" and
other shares through a broker or you may own shares through more than one
broker. In these situations you will receive multiple sets of proxy
materials. It is necessary for you to vote, sign and return all of the
proxy cards you receive in order to vote all of the shares you own. Each
proxy card you received came with its own prepaid return envelope; make
sure you return each proxy card in the return envelope which accompanied
that proxy card.
Q3: HOW DO I VOTE?
A: Sign and date each proxy card you receive, indicating your voting
preferences on each proposal, and return each proxy card in the prepaid
envelope which accompanied that proxy card. If you return a signed and
dated proxy card but you do not indicate your voting preferences, your
shares will be voted in favor of the director nominees and in favor of the
other proposals. All outstanding shares of Common Stock represented by
your signed and dated proxy received in time for the 1998 Annual Meeting
will be voted.
Q4: DOES MY VOTE MATTER?
A: Absolutely! Corporations are required to obtain shareholder approval for
the election of directors and other important matters. Shareholder
participation is not a mere formality, it is essential for the Company to
continue to function. Each share of Common Stock is entitled to one vote
and every share voted has the same weight.
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Q5: WHAT PERCENTAGE OF VOTES IS REQUIRED TO ELECT DIRECTORS?
A: If a quorum is obtained, the three nominees receiving the greatest number
of votes will be elected.
Q6: WHAT PERCENTAGE OF VOTES IS REQUIRED TO APPROVE OTHER PROPOSALS?
A: If a quorum is obtained, proposals other than the election of directors
require the affirmative vote of a majority of shares of Common Stock
represented at the meeting and entitled to vote. Since majority approval
is required, an "ABSTAIN" vote has the effect of a vote against the
proposal.
Q7: WHAT IS THE EFFECT OF NOT VOTING?
A: It depends on how you hold your shares. If you own shares as a Registered
Holder, rather than through a broker, your unvoted shares will not be
represented at the meeting and will not count toward the quorum
requirement. Assuming a quorum is obtained, your unvoted shares will not
affect whether a proposal is approved or rejected.
If you own shares through a broker and do not vote, your broker may
represent your shares at the meeting for purposes of obtaining a quorum. As
described in the answer to the following Question, in the absence of your
voting instruction, your broker may or may not vote your shares.
Q8: IF I DON'T VOTE, WILL MY BROKER VOTE FOR ME?
A: Maybe yes, maybe no. If you don't vote, your broker will represent your
shares at the meeting for purposes of obtaining a quorum and your broker
may or may not be able to vote your shares depending upon the subject of
the proposal. With respect to a limited group of proposals, if you don't
vote your broker is permitted to vote your shares in its discretion. With
respect to other proposals, however, your broker may not vote your shares
for you. With respect to these proposals, the aggregate number of unvoted
shares is reported as the "BROKER NON-VOTE." The Company believes brokers
will be permitted to vote unvoted shares on each of the proposals set
forth in this Proxy Statement.
Q9: WHAT IS THE EFFECT OF A "BROKER NON-VOTE"?
A: "Broker non-vote" shares are counted toward the quorum requirement but
they do not affect the determination of whether a matter is approved.
Q10:IF I OWN MY SHARES THROUGH A BROKER, HOW IS MY VOTE RECORDED?
A: Brokers typically own shares of the Company for many shareholders. In this
situation the Registered Holder on the Company's stock register is the
broker or its nominee. This often is referred to as holding shares in
"STREET NAME." The "BENEFICIAL OWNERS" do not appear in the Company's
shareholder register. Therefore, for shares held in Street Name,
distributing the proxy and tabulating votes each is a two-step process.
Brokers inform the Company how many of their clients are Beneficial Owners
and the Company provides the broker with that number of proxy materials.
Each broker then forwards the proxy materials to its clients who are
Beneficial Owners to obtain their votes. When you receive proxy materials
from your broker, the accompanying return envelope is addressed to return
your executed proxy card to your broker. Shortly before the Shareholders
Meeting, each broker totals the votes and submits a single proxy card
reflecting the aggregate votes of the Beneficial Owners for whom it holds
shares.
Q11:CAN I REVOKE MY PROXY AND CHANGE MY VOTE?
A: You have the right to revoke your proxy at any time prior to the time your
shares are voted. If you are a Registered Holder, your proxy can be
revoked in several ways: (i) by timely delivery of a written revocation
delivered to the Corporate Secretary, (ii) by submitting another valid
proxy bearing a later date, or (iii) by attending the meeting and giving
the Inspector of Elections notice that you intend to vote your shares in
person. If your shares are held by a broker, you must contact your broker
in order to revoke your proxy.
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Q12:WHO COUNTS THE VOTES?
A: Votes will be counted and certified by the Inspectors of Election, who are
employees of Norwest Bank Minnesota, National Association, the Company's
independent Transfer Agent and Registrar. If you are a Registered Holder,
your executed proxy card returns directly to Norwest for tabulation. As
noted above, if you hold your shares through a broker, your broker returns
one proxy card to Norwest on behalf of its clients.
Q13:HOW MUCH DOES THE PROXY SOLICITATION COST?
A: The Company has engaged the firm of Morrow & Co. to assist in the
distribution and solicitation of proxies for a fee of $6,000, plus
expenses. However, the proxy solicitor fee is only a small fraction of
total cost of the proxy process. Since the Company has approximately
150,000 shareholders, the largest expense in the proxy process is printing
and mailing the proxy materials. The Company anticipates that print/mail
costs for the 1998 Proxy materials will be approximately $400,000. Proxies
may be solicited on behalf of the Company by directors, officers or
employees of the Company in person or by mail, telephone or facsimile
transmission. No additional compensation will be paid to such directors,
officers, or employees for solicitation of proxies.
Q14:WHAT IS THE DEADLINE FOR SUBMITTING PROPOSALS TO BE CONSIDERED FOR
INCLUSION IN THE 1999 PROXY STATEMENT?
A: Shareholder proposals requested to be included in the Company's 1999 Proxy
Statement must be received by the Company not later than November 26,
1998. Proposals should be directed to Michael T. Whealy, Corporate
Secretary, First Data Corporation, 5660 New Northside Drive, Suite 1400,
Atlanta, Georgia, 30328.
Q15:WILL ANY OTHER BUSINESS BE TRANSACTED AT THE ANNUAL MEETING? IF SO, HOW
WILL MY PROXY BE VOTED?
A: Management does not know of any business to be transacted at the Annual
Meeting other than those matters described in this Proxy Statement. The
period specified in the Company's By-Laws for submitting proposals to be
considered at the Annual Meeting has passed and no proposals were
submitted. However, should any other matters properly come before the
Annual Meeting, and any adjournments and postponements thereof, shares
with respect to which voting authority has been granted to the Proxies
will be voted by the Proxies in accordance with their judgment.
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PROPOSALS SUBMITTED FOR SHAREHOLDER VOTE
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes serving staggered
three-year terms. The terms of office of three current directors, Ms. Spero,
Mr. Duques and Mr. Burdetsky, expire at the 1998 Annual Meeting of
Stockholders. They have been nominated for reelection through the 2001 Annual
Meeting of Stockholders or until a successor is elected and qualified. (See
pages 9-10 for information concerning all Directors). Ms. Spero, Mr. Duques
and Mr. Burdetsky have consented to being named in this Proxy Statement and to
serving if elected. In the case of a vacancy occurring during the year in any
class, the Board of Directors may elect another director as a replacement, may
leave the vacancy unfilled or may reduce the number of directors.
The terms of Messrs. Robinson, Schwartz and Staglin expire at the 1999
Annual Meeting of Stockholders. The terms of Messrs. Jones, Levenson and
Russell expire at the 2000 Annual Meeting of Stockholders.
A stockholder may (i) vote for the election of any one or more of the
nominees, or (ii) withhold authority to vote for one or more of the nominees
by so indicating on the proxy card. Your shares will be voted as you specify
on the enclosed proxy card. If you sign, date and return the proxy card
without specifying how you want your shares voted, they will be voted for the
election of the Director nominees. If unforseen circumstances (such as death
or disability) require the Board of Directors to substitute another person for
any of the Director nominees, your shares will be voted for that other person.
Directors are elected by a plurality of votes of the shares represented at
the meeting and entitled to vote. Therefore, if a quorum is present, the two
nominees receiving the greatest number of votes will be elected. The effects
of unvoted shares, abstentions and "broker non-votes" are discussed in the
preceding Questions and Answers.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO REELECT MS. SPERO, MR.
BURDETSKY AND MR. DUQUES AS DIRECTORS FOR A THREE-YEAR TERM.
PROPOSAL 2
APPROVAL OF AN AMENDMENT TO THE
COMPANY'S 1992 LONG-TERM INCENTIVE PLAN
The Compensation Committee and the Board have approved an amendment to the
Company's 1992 Long-Term Incentive Plan (the "Incentive Plan") to increase the
number of shares of First Data Common Stock issuable under the plan.
The Company's long-term success depends upon its ability to attract, retain
and encourage dedicated, competent and resourceful key employees. To further
these goals, the Board adopted and the stockholders approved the Incentive
Plan in April 1992. The purpose of the Incentive Plan is to direct the
attention and efforts of participating employees to the long-term performance
of the Company and its subsidiaries, by relating incentive compensation to the
achievement of long-term corporate economic objectives. The Incentive Plan is
also designed to retain, reward and motivate participating employees by
providing an opportunity for investment in the Company and the advantages
inherent in ownership of Company stock.
PROPOSED AMENDMENT
The total number of shares of First Data Common Stock ("Common Stock")
authorized for issuance under the Incentive Plan is 47,580,000, with no more
than 8,000,000 of those shares authorized for issuance in connection with
awards of restricted stock. As of March 16, 1998, 43,860,847 shares of Common
Stock had
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been granted in connection with either options or restricted stock under the
Incentive Plan and a total of 3,719,153 shares remained available for grant.
The proposed amendment would increase the number of shares of Common Stock
authorized for issuance under the Incentive Plan by 22,000,000 shares from
47,580,000 to 69,580,000, and increase the allotment of those shares
authorized for issuance in connection with awards of restricted stock from
8,000,000 to 12,000,000.
Under the Incentive Plan, shares of Common Stock and options to purchase
such shares which are tendered in connection with the exercise of options to
purchase Common Stock would be available for issuance under new awards. If any
shares issued as restricted stock or otherwise subject to forfeiture rights
are reacquired by the Company pursuant to such rights, or if any award is
canceled, terminates or expires unexercised, any shares of Common Stock that
would otherwise have been issuable pursuant thereto also will be available for
issuance under new awards.
SUMMARY OF INCENTIVE PLAN
The following is a description of the principal features of the Incentive
Plan, as amended. This description is qualified in its entirety by reference
to the Incentive Plan, as proposed to be amended, a copy of which is attached
as Exhibit A to this proxy statement.
The Incentive Plan provides for the grant to key employees and other key
individuals who perform services for the Company and its affiliates
("Participants") the following types of incentive awards: stock options,
restricted stock, and awards to Participants who are foreign nationals or are
employed or performing services outside of the United States. The Incentive
Plan was amended on March 11, 1998 to remove stock appreciation rights
("SARs") as a type of award. As of March 16, 1998, the Company has granted
options under the Incentive Plan to approximately 5,000 employees. The Company
has also granted restricted stock awards to approximately 2,000 employees with
technical skills as part of a special retention program for systems and
programming talent that is critical to the Company's success. No other awards
have been granted under the Incentive Plan.
The Compensation Committee has the exclusive discretion to select the
Participants and to determine the type, size and terms of each award, to
modify the terms of awards, to determine when awards will be granted and paid,
and to make all other determinations which it deems necessary or desirable in
the interpretation and administration of the Incentive Plan. The Incentive
Plan is scheduled to terminate in February 2002, unless extended for up to an
additional five years by action of the Board. The Incentive Plan may be
amended or suspended in whole or in part at any time by the Board. With
limited exceptions, including termination of employment as a result of death,
disability, retirement or an involuntary termination other than for cause,
rights to these forms of contingent compensation are forfeited if a
recipient's employment or performance of services terminates within a
specified period following the award.
Options, which include nonqualified stock options (including purchased stock
options, as described below) and incentive stock options, are rights to
purchase a specified number of shares of Common Stock at a price fixed by the
Compensation Committee. The option price may not be less than the fair market
value of the Common Stock subject to such option at the time the option is
granted, and, in the case of an incentive stock option granted to an employee
who owns stock representing more than ten percent of the voting power of all
classes of stock of the Company or any of its subsidiaries, the option price
may not be less than 110% of such fair market value at the time the option is
granted. In the case of purchased stock options, a specified number of
nonqualified stock options (with an option price as described above) are
offered for grant to selected Participants in exchange for a purchase price,
specified by the Compensation Committee, which is payable at the time of
grant. Options generally will expire no later than ten years after the date on
which they are granted. Options will become exercisable at such time and in
such installments as the Compensation Committee shall determine. Payment of
the option price must be made in full at the time of exercise in such form
(including, but not limited to, cash, Common Stock or the surrender of another
outstanding award or bonus payment or any combination thereof) as the
Compensation Committee may determine.
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Pursuant to the terms of the purchased stock options granted to date, such
options generally become exercisable as to one-third of the shares subject to
such options on the first through the third anniversaries of the grant date.
All purchased stock options have been granted with an exercise price per share
equal to 100% of the fair market value of the Common Stock on the date of
grant. The purchase price per share of these options has ranged from 10% to
20% of the fair market value of the stock on the date of grant.
A restricted stock award is an award of a given number of shares of Common
Stock which are subject to a restriction against transfer during a period set
by the Compensation Committee. During the restricted period, the Participant
generally has the right to vote and receive dividends on the shares. The
restricted period for all shares of restricted stock may not be less than one
year. Restricted stock may be awarded in the form of phantom stock which
provides for a cash payment equivalent to the fair market value of a specified
number of shares of Common Stock upon the lapse of restrictions and, in the
discretion of the Compensation Committee, dividend equivalents thereon.
Restricted stock has been awarded to date only as part of the program
described above designed to retain employees with critical technical skills.
TAX CONSEQUENCES OF STOCK OPTIONS
No taxable income is realized by the Participant upon the grant of a non-
qualified stock option, and no deduction is then available to the Company.
Upon exercise of the option, the excess of the fair market value of the shares
on the date of exercise over the option price will be taxable to the
Participant and deductible by the Company. The tax basis of shares acquired
will be the fair market value on the date of exercise. For shares held for
more than one year following exercise of the option, the Participant will
realize long-term capital gain or loss upon disposition.
No taxable income is realized by a Participant and no tax deduction is
available to the Company upon either the grant or exercise of an incentive
stock option. If a Participant holds the shares acquired upon the exercise of
an incentive stock option for more than one year after the stock option
exercise and more than two years after the date of the option grant (holding
period), the difference between the option price and the amount realized upon
the sale of the shares will be treated as long-term capital gain or loss and
no deduction will be available to the Company. If the shares are transferred
before the expiration of the above-described holding period, the Participant
will recognize ordinary compensation income and the Company will be entitled
to a deduction equal to the difference between the option price and the lesser
of the fair market value of the shares on the date of exercise or the amount
realized on the disposition. The amount of such compensation income will be
added to the Participant's basis for such shares in determining the amount of
gain or loss from such disposition, and such gain or loss will be taxable as
long-term or short-term capital gain or loss depending upon the holding period
before disposition. For shares held for more than one year, the Participant
will realize long-term capital gain or loss upon disposition.
The Company believes that compensation recognized by Participants on the
exercise of options will be considered performance-based compensation and thus
not subject to the $1,000,000 limit of Section 162(m) of the Internal Revenue
Code. Any compensation includable in the gross income of a Participant will be
subject to appropriate federal income tax withholding.
The discussion set forth above is intended only as a summary and does not
purport to be a complete enumeration or analysis of all potential tax effects
relevant to recipients of option awards under the Incentive Plan.
OTHER INFORMATION
No awards or other benefits have been granted under the Incentive Plan to
any person in connection with, or contingent upon, approval of the proposed
amendment to the Incentive Plan and no determination has been made by the
Compensation Committee regarding the future grant of specific awards under the
Incentive Plan. As required by the Incentive Plan, all of the options have
been granted under the Incentive Plan with an exercise price per share equal
to at least 100% of the fair market value of the stock on the date of grant.
On March 16, 1998 the closing price per share of the Common Stock was $34
3/16.
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With respect to this proposal and the following proposal, a stockholder may,
(i) vote "FOR," (ii) vote "AGAINST," or (iii) "ABSTAIN" from voting. Your
shares will be voted as you specify on the enclosed proxy card. If no
instructions are given, the shares will be voted for each of the proposals. If
a quorum is present, approval of this proposal and the following proposal
requires the affirmative vote of a majority of the shares of Common Stock
present in person or by proxy at the meeting and entitled to vote on such
matter. The effects of unvoted shares, abstentions and "broker non-votes" are
discussed in the preceding Questions and Answers.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 2.
PROPOSAL 3
SELECTION OF AUDITORS
The Board of Directors recommends to the stockholders the ratification of
the selection of Ernst & Young LLP, independent auditors, to audit the
accounts of the Company and its subsidiaries for 1998. In the event the
stockholders fail to ratify the appointment, the Board of Directors will
consider it a direction to select other auditors for the subsequent year. Even
if the selection is ratified, the Board of Directors, in its discretion, may
select a new independent accounting firm at any time during the year, if the
Board of Directors feels that such a change would be in the best interest of
the Company and its stockholders.
Ernst & Young LLP has been serving as the independent auditors for the
Company or its predecessor entities since 1980. Ernst & Young LLP follows a
policy of rotating the partner in charge of the Company's audit every seven
years. Other partners and non-partner personnel are rotated on a periodic
basis.
A representative of Ernst & Young LLP will be present at the meeting with
the opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR PROPOSAL 3.
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THE FIRST DATA CORPORATION
BOARD OF DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS DIRECTOR
NAME AND AGE EXPERIENCE AND DIRECTORSHIPS SINCE
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<C> <S> <C>
Ben Burdetsky ......... Professor Emeritus of the School of 1992
Age 69 Business and Public Management of The
George Washington University since 1995
and Director of the Burdetsky Labor-
Management Institute at the University.
Dr. Burdetsky was a member of the full-
time faculty from January 1977 to 1994.
From June 1988 until 1992, he served as
Dean, and from March 1984 to June 1988 he
served as an Associate Dean, of the School
of Business and Public Management of The
George Washington University. Dr.
Burdetsky is a director of National
Capital Preferred Provider Organization.
Henry C. Duques........ Chairman and Chief Executive Officer of the 1989
Age 54 Company from April 1989 to the present.
From September 1987 to 1989, he served as
President and Chief Executive Officer of
the Data Based Services Group of American
Express Travel Related Services Company,
Inc., the predecessor of FDC. He was Group
President Financial Services and a member
of the Board of Directors of Automatic
Data Processing, Inc. ("ADP") from 1984 to
1987. Mr. Duques is a director of Unisys
Corporation.
Courtney F. Jones...... A director of Medical Manager Corporation 1992
Age 58 since April 1997. From July 1989 to
December 1990, Managing Director in the
Investment Banking Division of Merrill
Lynch & Co., Inc. From October 1985 until
July 1989, he served as Chief Financial
Officer, Executive Vice President and a
member of the Board of Directors of
Merrill Lynch & Co., Inc. Prior to that,
Mr. Jones served as Treasurer and
Secretary of the Finance Committee of the
Board of Directors of General Motors
Corporation. He also was formerly a
Director of General Motors Acceptance
Corporation and General Motors Insurance
Company.
Robert J. Levenson .... Executive Vice President of the Company 1992
Age 56 from 1993 to the present. Former Senior
Executive Vice President, Chief Operating
Officer, and Member of the Office of the
President and Director of Medco
Containment Services, Inc., a provider of
managed care prescription benefits, from
October 1990 to December, 1992. From 1985
until October 1990, he was a Group
President and Director of ADP. Mr.
Levenson is a director of Superior
Telecom, Inc. and Broadway & Seymour, Inc.
James D. Robinson III.. Chairman and Chief Executive Officer of RRE 1992
Age 62 Investors, LLC a private venture
investment firm, and Chairman of Violy
Byorum & Partners Holdings, LLC, a private
firm specializing in financial advisory
and investment banking activities in Latin
America. He previously served as Chairman,
Chief Executive Officer and as a director
of American Express Company from 1977 to
1993. Mr. Robinson is a director of
Bristol-Myers Squibb Company, The Coca-
Cola Company, Cambridge Technology
Partners, Union Pacific Corporation and
The Coleman Company.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, BUSINESS DIRECTOR
NAME AND AGE EXPERIENCE AND DIRECTORSHIPS SINCE
------------ ------------------------------ --------
<C> <S> <C>
Charles T. Russell... Former President and Chief Executive Officer 1994
Age 68 of Visa International from 1984 to January
1994. Mr. Russell joined Visa in 1971. Mr.
Russell serves on the Board of Visitors at
the University of Pittsburgh's Joseph M.
Katz School of Business. Mr. Russell also
is a Director of CyberCash, Inc., the
Janol-Hydro Corp., a manufacturer of
automobile and truck braking equipment, E-
Funds Corp., a check processing company,
and InfiStar Corporation (formerly Card
Issuer Program Management Corporation),
which provides management services to
credit card issuers.
Bernard L. Schwartz.. Chairman and Chief Executive Officer, Loral 1992
Age 72 Space & Communications Ltd., a high-
technology company concentrating on
satellite manufacturing and satellite-based
services. Chairman and Chief Executive
Officer, Loral Corporation, a manufacturer
of components for information systems, from
1972 to 1996. Chairman and Chief Executive
Officer of Globalstar Telecommunications
Limited, which is developing a world-wide,
low-earth-orbit satellite-based digital
telecommunications service. He also serves
as Chairman and Chief Executive Officer of
K&F Industries Inc.,world-wide supplier of
aircraft braking systems and Chairman of
Space Systems/Loral, a manufacturer of
telecommunications and environmental
satellites. Mr. Schwartz is a Director of
Reliance Group Holdings, Inc., a trustee of
New York University Medical Center, and a
trustee of Thirteen/WNET.
Joan E. Spero........ President of the Doris Duke Charitable 1998
Age 53 Foundation since 1997. Ms. Spero was
Undersecretary of State for Economic,
Business and Agricultural Affairs from 1993
to 1997. From 1981 to 1993, Ms. Spero held
several offices with American Express
Company, the last being Executive Vice
President, Corporate Affairs and
Communications. Prior to that Ms. Spero was
Ambassador to the United Nations for
Economic and Social Affairs from 1980 to
1981 and she was an Assistant Professor at
Columbia University from 1973 to 1979. Ms.
Spero is a member of the Board of Trustees
of the Brookings Institution and the
Wisconsin Alumni Research Foundation. She
was a member of the Board of Directors of
Hercules Incorporated from 1985 to 1993 and
acted as Chair of the Audit and
Compensation Committees for periods of that
time, she was a member of the Board of
Trustees of Amherst College from 1988 to
1993 and she was a member of the Board of
Directors of the French-American Foundation
from 1988 to 1993.
Garen K. Staglin..... Chairman of the Board of Directors of 1992
Age 53 Safelite Glass Corporation, a manufacturer
and retailer of auto glass, since August
1991; from August 1991 until April 1997,
Mr. Staglin also was the Chief Executive
Officer of Safelite Glass Corporation. From
April 1980 until August 1991 Mr. Staglin
served as the Corporate Vice President and
General Manager of ADP's Automotive
Services Group. He serves as a Director of
Quick Response Services, Inc., CyberCash,
Inc. and Specialized Bicycle Corp. Mr.
Staglin also serves on the Advisory Council
of the Stanford Graduate School of
Business.
</TABLE>
10
<PAGE>
GOVERNANCE OF THE COMPANY
In accordance with applicable Delaware law, the business of the Company is
managed under the direction of its Board of Directors. Pursuant to the
Company's Restated Certificate of Incorporation, the Board of Directors is to
consist of not less than one nor more than fifteen Directors. Directors are
divided into three classes and Directors in each class are elected for a
three-year term. During all of 1997, the Board was composed of eight
Directors. At its March 11, 1998 meeting, the Board increased to nine the
number of Directors on the Board and elected Joan E. Spero to fill the
resulting vacancy. Pursuant to the Company's Restated Certificate of
Incorporation, newly elected Directors are to be elected to that class which
keeps the size of each class as nearly as equal as possible for a term that
coincides with the remaining term of that class. Consequently, Ms. Spero was
elected to that class which previously had only two Directors, Messrs.
Burdetsky and Duques, which class has a term that expires at the 1998 Annual
Meeting of Stockholders. During 1997, the Board of Directors met seven times
(not including Committee meetings). Each of the Directors attended at least 75
percent of the aggregate number of meetings of the Board and Board committees
on which they served during 1997.
COMMITTEES OF THE BOARD OF DIRECTORS
The members of the Audit Committee are Courtney F. Jones (Chairperson), Ben
Burdetsky and Garen K. Staglin. The Audit Committee consists solely of
directors who are not current or former employees of the Company or any
affiliate and are, in the opinion of the Board of Directors, free from any
relationship that would interfere with the exercise of independent judgment in
the discharge of the Audit Committee's duties. The Audit Committee represents
the Board of Directors in discharging its responsibilities relating to the
accounting, reporting and financial control practices of the Company and its
subsidiaries. This Committee has general responsibility for reviewing with
management the financial controls, accounting, and audit and reporting
activities of the Company and its subsidiaries. The Committee annually reviews
the qualifications of the Company's independent auditors, makes
recommendations to the Board of Directors as to their selection, reviews the
scope, fees and results of their audit, reviews their non-audit services and
related fees, reviews their comment letters and management's responses thereto
and reviews any major accounting changes made or contemplated. In addition,
the Committee reviews the effectiveness and efficiency of the Company's
internal audit staff. The Committee also oversees the implementation of
policies concerning and compliance with the Company's Code of Conduct, as well
as policies concerning business continuity planning. During 1997, the Audit
Committee met six times.
The members of the Compensation and Benefits Committee (the "Compensation
Committee") are Garen K. Staglin (Chairperson), Ben Burdetsky, Charles T.
Russell and Bernard L. Schwartz. The Compensation Committee consists solely of
directors who are not current or former employees of the Company or any
affiliate and is responsible for the administration of all salary and
incentive compensation plans for the officers and key employees of the Company
and its subsidiaries. The Compensation Committee also reviews management's
organization and development and approves grants and otherwise administers
specific awards under the 1992 Long-Term Incentive Plan. The Compensation
Committee regularly consults with independent compensation advisors. The
Compensation Committee also has responsibility for screening and nominating
new Director candidates. In exercising its Director nomination
responsibilities, the Committee shall consider women and minority candidates
consistent with the Company's nondiscrimination policies. In addition, the
Committee will consider persons recommended by stockholders. Stockholder
recommendations may be submitted to the Secretary of the Company at 5660 New
Northside Drive, Suite 1400, Atlanta, Georgia 30328, and they will be
forwarded to the Compensation Committee members for their consideration.
During 1997, the Compensation Committee met seven times.
The members of the Executive Committee are James D. Robinson III
(Chairperson), Henry C. Duques, and Courtney F. Jones. The Executive Committee
meets in place of the full Board of Directors in intervals between meetings of
the Board. The Committee may act on behalf of the Board of Directors on all
matters permitted by the General Corporation Law of the State of Delaware. The
Executive Committee met three times in 1997.
11
<PAGE>
COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth, as of January 2, 1998, the beneficial
ownership of Common Stock by all directors and nominees, each of the executive
officers named in the Summary Compensation Table contained in this Proxy
Statement and all directors and executive officers as a group. Each person has
sole voting and investment power of the shares, except as noted.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
NAME OWNERSHIP(1)
---- ------------
<S> <C>
Lee Adrean................................................ 161,702
Ben Burdetsky............................................. 31,488
Henry C. Duques........................................... 2,633,935(2)
Charles T. Fote........................................... 809,260
Walter M. Hoff............................................ 519,098
Courtney F. Jones......................................... 61,829
Robert J. Levenson........................................ 613,517
James D. Robinson III..................................... 78,829(3)
Charles T. Russell........................................ 29,237
Bernard L. Schwartz....................................... 62,482
Joan E. Spero............................................. 0(4)
Garen K. Staglin.......................................... 69,829
All directors and executive officers as a group (15 per-
sons).................................................... 5,515,323
</TABLE>
- --------
(1) The number of shares reported includes shares covered by options that are
exercisable within 60 days of January 2, 1998 as follows: Mr. Adrean,
159,702; Mr. Burdetsky, 30,688; Mr. Duques, 2,628,703; Mr. Fote, 807,292;
Mr. Hoff, 518,068; Mr. Jones, 59,829; Mr. Levenson, 604,150; Mr. Robinson,
59,829; Mr. Russell, 28,837; Mr. Schwartz, 55,482; Ms. Spero, 0; Mr.
Staglin, 39,221; all directors and executive officers as a group,
5,433,527.
(2) Includes 4,268 shares held by Mr. Duques' wife.
(3) Includes 5,000 shares held by Mr. Robinson's wife.
(4) Became a Director on March 11, 1998.
The percent of outstanding Common Stock beneficially owned by all directors
and executive officers as a group is approximately 1.23%. The percentage
beneficially owned by any director or nominee does not exceed 1%.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or its affiliates were paid
an annual retainer of $50,000. In addition, a non-employee chairman of a
standing committee receives an annual retainer of $5,000. Non-employee
directors have the option of electing to receive all or a portion of the
annual retainer fees in the form of stock option grants pursuant to the First
Data Corporation 1993 Director's Stock Option Plan. Non-employee directors
also receive annual grants of non-qualified options pursuant to the same plan.
Each director receives options for 10,000 shares of Common Stock upon
commencing services as a director and options for 4,000 shares of Common Stock
on the date of each annual stockholders' meeting thereafter, except that on
the fourth and eighth annual stockholders' meetings thereafter, instead of
options for 4,000 shares, each director receives options for 14,000 shares.
Directors are reimbursed for their actual expenses incurred in attending
Board, committee and stockholder meetings, including those for travel, food
and lodging.
12
<PAGE>
EXECUTIVE COMPENSATION REPORT BY THE COMPENSATION AND BENEFITS COMMITTEE
The Compensation Committee establishes compensation policies and employee
benefits plans. It also sets the bonus awards for senior management, including
the Named Executives.
Compensation Philosophy
The Company's executive compensation programs are based on the belief that
the interests of its Chief Executive Officer (CEO) and senior management
should be aligned with those of the stockholders. For these executives, the
Compensation Committee has determined that a significant portion of total
compensation should be comprised of "at-risk," performance-based components.
The at-risk components provide longer-term rewards that are not earned unless
specific, preestablished goals are met.
In furtherance of its objectives, the Compensation Committee has structured
the CEO's total compensation as a combination of base salary, a long-term
incentive award and stock options. Similarly, the Compensation Committee has
structured the total compensation of senior management as a combination of
base salary, a long-term incentive award, stock options, plus an annual
incentive award.
The Compensation Committee seeks to set executive compensation at levels
sufficient to attract, retain and motivate highly qualified executive
personnel in light of the compensation practices of a group comprised of
companies of comparable size and complexity and top-performing companies in
various business sectors in which the Company operates (the "Comparator
Group"). An independent consultant surveys the Comparator Group to determine
compensation practices and provides the Compensation Committee with
comparative evaluations and advice.
The Comparator Group has generally included the companies in the peer group
included in the Performance Graph in the Proxy Statement. In this Proxy
Statement, the Company is using for the first time in the Performance Graph a
Company-selected peer group of ten computer services companies. The Comparator
Group will include all of those companies. It will also continue to include
other companies that are in the same business or are of a similar revenue size
reflecting the Compensation Committee's belief that the broader group is
representative of the Company's main competition for executive talent.
The Compensation Committee's philosophy is that base salary and annual
incentive compensation should be competitive with the Comparator Group, and,
based upon the Company's financial performance both as a whole and relative to
specific targets, that long-term incentive compensation must promote corporate
performance which exceeds both a minimum rate of return and objectively
identified targets relative to the S&P 500 Index.
Base Salary
It is the Compensation Committee's policy, in setting total compensation,
that while base salary should remain competitive, incentive compensation
should be emphasized. Accordingly, Mr. Duques' salary is targeted to reflect
salaries below the median paid by the Comparator Group. The salaries of the
other Named Executives are targeted to reflect salaries at approximately the
50th percentile paid by the Comparator Group. The Committee targets the total
compensation to be paid when preestablished performance goals are achieved to
be at or above the 75th percentile paid by the Comparator Group.
Stock Options
The Compensation Committee has established an annual option grant program
under which the number of option grants made each January for the Named
Executives and other senior management is performance driven. The CEO is
eligible for up to 75,000 options and each of the other Named Executives is
eligible for up to 50,000
13
<PAGE>
options. One-half of the total possible grant is based on the performance of
the Company's Common Stock as compared to that of the companies in the S&P 500
Index and one-half is based on the achievement of business unit and individual
performance objectives.
In 1997, the Committee reviewed the option holdings of senior management. To
address concerns about retention and the need to ensure that management's
interests clearly align with those of stockholders, the Committee decided to
make a special option grant to senior management including the Named
Executives. Accordingly, in addition to the annual grant described above, the
Committee awarded options that provided for accelerated vesting if certain
earnings-per-share targets are achieved in 1998 and 1999. If the targets are
not achieved, the special grants vest on the sixth anniversary of grant. These
grants are reflected in the table on page 17.
Annual Incentive Compensation
In 1997, as in prior years, the Company adopted an annual management
incentive program which provides a direct financial incentive to its executive
management, except Mr. Duques, in the form of bonus targets payable if
specific goals are achieved. The annual incentive opportunity is based on the
overall performance of the Company or on the performance of a business unit or
staff function. The purpose of this incentive is to tie a significant portion
of annual pay directly to key financial results and other important
objectives. For 1997, the incentive awards related directly to business
performance factors, most importantly the achievement of pre-tax profit
targets, and where performance exceeded or did not meet preestablished
targets, incentive payments were increased or decreased accordingly.
Long-Term Incentive Compensation
Because the Compensation Committee considers a long-term orientation
essential for a CEO, all of Mr. Duques' incentive compensation is tied to
long-term goals. Mr. Duques' incentive compensation is measured entirely under
the Company' Shareholder Value Plan. The other Named Executives also
participate in the plan. Under the plan, a unit value is determined at the end
of each year based on the performance of the Company's Common Stock as
compared to that of the companies in the S&P 500 Index during the preceding
two years (subject to the Committee's discretion to adjust downward). The
award amount is banked for a two-year period and increases annually by an
amount equal to 50% of the Company's return on equity percentage or, if the
return on equity is negative, decreases by an amount equal to 100% of the
Company's return on equity percentage. Under the plan in effect in 1997, the
maximum unit value (awarded if the percentage increase in the price of the
Company's common stock, plus dividends, exceeds that of 80% of the companies
in the S&P 500 Index) is $3,600,000 for Mr. Duques and $750,000 for the other
Named Executives. If the Company increase is less than that of 50% of the
companies in the S&P 500 Index, the unit value awarded is zero. In addition,
the unit value is zero unless the annual percentage growth in the Company's
total stockholder return exceeds a minimum threshold measured by the average
two-year Treasury note interest rate for the 60-day period prior to the
beginning of the performance period. Based on the performance of the Company's
stock for the two-year period ending December 31, 1997, the unit value
established for each of the Named Executives at the end of 1997 was zero.
Performance Reviews
Although the CEO's incentive award is formula driven (subject to the
Compensation Committee's discretion to make a downward adjustment), the
Compensation Committee has developed a formalized process for providing
performance review and feedback to Mr. Duques. For 1997, the outside Board
members and Mr. Duques mutually developed goals for him in several major areas
including strategy and long-term objectives and executive development and
succession planning. In December 1997, Mr. Duques submitted a self-assessment
to the outside Board members. In January 1998, the outside Board members met
separately to discuss the assessment, then conducted a performance review with
Mr. Duques, 1998 performance goals were set at this
14
<PAGE>
meeting. Similarly, in January 1998, Mr. Duques reviewed his assessment of
each of the other Named Executives with the outside Board members and received
their input. Mr. Duques then met with each of the Named Executives to discuss
performance. Performance goals for 1998 were set at these meetings.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million for compensation paid to any of the Named Executives unless certain
requirements are met. The Company's Shareholder Value Plan approved by
stockholders at the May 15, 1996 Annual Meeting of Stockholders meets the
requirements. The Company's 1992 Long-Term Incentive Plan under which options
are granted to the Named Executives has met the requirements in the past and
will continue to do so, provided the proposed amendment is approved by the
stockholders at the 1998 Annual Meeting. The Compensation Committee's present
intention is to comply with the requirements of exemption from Section 162(m)
to the extent necessary to obtain full deductibility of executive compensation
unless the Compensation Committee determines that such compliance would not be
in the best interest of the Company and its stockholders.
COMPENSATION AND BENEFITS COMMITTEE
Garen K. Staglin (Chairperson)
Charles T. Russell
Ben Burdetsky
Bernard L. Schwartz
15
<PAGE>
SUMMARY COMPENSATION TABLE
The following table shows the cash and other compensation paid or earned and
certain long-term awards made to the Named Executives for all services to the
Company in all capacities for the fiscal years ended December 31, 1997,
December 31, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ----------------------
AWARDS PAYOUTS
----------- ---------
OTHER ANNUAL SECURITIES LTIP ALL OTHER
NAME AND COMPENSATION UNDERLYING PAYOUT COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(5) OPTIONS (#) ($) ($)(8)
------------------ ---- ---------- --------- ------------ ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Henry C. Duques......... 1997 600,000 0(2) 0 463,630 1,726,537(7) 82,573
Chairman of the Board 1996 611,541 0 0 214,054 3,315,906 65,583
and Chief Executive
Officer 1995 501,543 0 0 300,000 0 45,129
Lee Adrean.............. 1997 388,462 100,000 0 130,800 0 31,774
Executive Vice
President 1996 356,743 108,000 0 44,594 0 15,200
and Chief Financial
Officer (1) 1995 207,688 140,616(3) 50,181 261,286(6) 0 0
Charles T. Fote......... 1997 436,336 225,000 0 184,070 642,928(7) 60,000
Executive Vice
President 1996 400,010 120,000 0 44,594 0 19,656
1995 314,433 140,000 0 100,000 0 14,150
Walter M. Hoff.......... 1997 437,502 215,044(4) 0 180,800 715,094(7) 81,935
Executive Vice
President 1996 399,984 110,000 124,459 44,594 0 30,504
1995 317,500 0 0 100,000 0 19,600
Robert J. Levenson...... 1997 369,231 100,000 0 75,800 642,928(7) 64,000
Executive Vice
President 1996 358,473 85,000 0 44,594 0 20,694
1995 305,000 60,000 0 50,000 0 15,093
</TABLE>
- --------
(1) Mr. Adrean commenced employment with the Company May 1, 1995.
(2) Mr. Duques is not eligible for an annual bonus because the Compensation
Committee believes the focus of the CEO should be long-term. His entire
incentive opportunity is pursuant to a long-term plan.
(3) Includes a cash signing bonus of $87,250. In lieu of receiving additional
cash as a signing bonus and as a portion of his annual bonus, Mr. Adrean
elected to receive stock options which are included among those reported
in this table.
(4) Mr. Hoff received a $50,000 regular annual bonus for 1997 performance. The
remainder of the amount shown represents a special bonus paid in April,
1997 to recognize dramatic quality improvement in Mr. Hoff's business
units during 1996 and early 1997. In early 1996, Mr. Hoff and the
Compensation Committee determined that Mr. Hoff should receive no bonus
for 1995 because of quality issues in his units. No bonus was awarded at
that time and the Compensation Committee advised Mr. Hoff that it would
consider a special award at a later unspecified time if quality
significantly improved.
(5) Includes relocation, moving expense and associated reimbursement amounts
of $50,181 for Mr. Adrean in 1995 and $120,243 for Mr. Hoff in 1996. The
amount of perquisites and other personal benefits are disclosed in this
column only if they exceed the lesser of $50,000 or 10% of the total
annual salary and bonus.
(6) Includes stock options which Mr. Adrean elected to receive in lieu of
bonus amounts for 1995.
(7) These awards are payouts of amounts "banked" at the end of 1994. Before
the awards were banked, Mr. Duques waived $1,500,000, Mr. Fote and Mr.
Levenson each waived $110,000 and Mr. Hoff waived $55,000 of the award,
and received options instead.
(8) Amounts shown for Messrs. Adrean, Fote and Levenson for 1997 are Company
contributions to defined contribution plans. The amount shown for Mr. Hoff
in 1997 consists of Company contributions to defined contribution plans
($79,000) and the dollar value of above-market interest on deferred
compensation ($2,935). The amount shown for Mr. Duques for 1997 consists
of Company contributions to defined contribution plans ($45,000), the
dollar value of above-market interest on deferred compensation ($12,689)
and the dollar value of split dollar life insurance premiums under a
contract originally entered into by American Express Company, the
Company's former parent ($24,884).
16
<PAGE>
OPTIONS GRANTS IN 1997
The following table contains information concerning grants of stock options
under the Incentive Plan to each of the Named Executives during the year ended
December 31, 1997:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE GRANT
UNDERLYING GRANTED TO OR BASE DATE PRESENT
OPTIONS EMPLOYEES IN PRICE EXPIRATION VALUE ($)
NAME GRANTED (#) 1997(4) ($/SHARE) DATE (5)
- ---- ----------- ------------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Henry C. Duques.... 32,600(1) 0.3562 37.0625 01/22/07 375,525
425,000(2) 4.6432 37.0625 01/22/07 5,532,735
6,030(3) 0.0659 36.5625 09/17/07 68,523
Lee Adrean......... 30,800(1) 0.3365 37.0625 01/22/07 354,791
100,000(2) 1.0925 37.0625 01/22/07 1,301,820
Charles T. Fote.... 30,800(1) 0.3365 37.0625 01/22/07 354,791
150,000(2) 1.6388 37.0625 01/22/07 1,952,730
3,270(3) 0.0357 36.5625 09/17/07 37,159
Walter M. Hoff..... 30,800(1) 0.3365 37.0625 01/22/07 354,791
150,000(2) 1.6388 37.0625 01/22/07 1,952,730
Robert J. Leven-
son............... 25,800(1) 0.2819 37.0625 01/22/07 297,195
50,000(2) 0.5463 37.0625 01/22/07 650,910
</TABLE>
- --------
(1) Options shown were granted under the Incentive Plan, carry an exercise
price of 100% of the fair-market value on the date of grant and become
exercisable in increments of one-fourth each year beginning on the first
anniversary date of the grant.
(2) Options were awarded under the Incentive Plan as a special one-time grant.
Fifty percent of the granted options will vest early in 1999 and any
options remaining unvested will vest in early 2000 if certain earnings per
share targets are met. If the targets are not met, the options will vest
on the sixth anniversary of the grant, provided the optionee continuously
remains an employee from the date of grant to the sixth anniversary date.
(3) Options shown were granted under the Incentive Plan as part of a grant to
all employees affected by the freezing of the Company's retirement plan.
They carry an exercise price of 100% of the fair market value on the date
of grant and generally become exercisable on the fifth anniversary of the
grant.
(4) Based on options to purchase an aggregate of 9,150,343 shares granted
under the Incentive Plan during 1997 to all employees.
(5) These values were calculated using the Black-Scholes single option pricing
model, a formula widely used and accepted for valuing traded stock
options. The model is based on immediate exercisability and
transferability which are not features of the options shown in the table.
Any ultimate value will depend on the market value of the Company's stock
at a future date. The following assumptions were used to calculate the
values shown: estimated future dividend yield of 0.22%; expected price
volatility of 0.189; risk-free rate of return of 6.23%; and option holding
period of 5 years. For options described in footnote (2), the option
holding period was assumed to be 6 years.
17
<PAGE>
AGGREGATED OPTION EXERCISES IN 1997 AND
YEAR-END 1997 OPTION VALUES
The following table sets forth information for the Named Executives
regarding the exercise of Company stock options during 1997 and unexercised
FDC stock options held as of the end of 1997:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT DECEMBER 31, 1997 AT DECEMBER 31, 1997(1)
ACQUIRED ON VALUE ------------------------------- ----------------------------
NAME EXERCISE(#) REALIZED ($) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE UNEXERCISABLE($)
- ---- ----------- ------------ -------------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Henry C. Duques......... 0 0 2,620,554 774,170 35,478,246 0
Lee Adrean.............. 0 0 152,003 284,677 122,085 94,643
Charles T. Fote......... 0 0 799,593 267,515 11,763,816 0
Walter Hoff............. 60,000 1,612,500 510,369 264,245 7,411,236 0
Robert J. Levenson...... 0 0 597,701 159,245 5,538,441 0
- --------
</TABLE>
(1) The amounts shown reflect the $29.5313 fair market value of the Company's
stock on December 31, 1997 less the option exercise price, but they do not
reflect the impact of taxes.
LONG-TERM INCENTIVE PLANS--AWARDS IN 1997
The following table sets forth information regarding Long-Term Incentive
Plan awards made in 1997 for the Named Executives:
<TABLE>
<CAPTION>
PERFORMANCES ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF OR OTHER NON-STOCK PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL ---------------------------------
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) PAYOUT ($) (2) ($) (3) ($) (4)
- ---- ------------- ------------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C>
Henry C. Duques............. -0- 4 years 660,000 N/A 3,600,000
Lee Adrean.................. -0- 4 years 137,500 N/A 750,000
Charles T. Fote............. -0- 4 years 137,500 N/A 750,000
Walter M. Hoff.............. -0- 4 years 137,500 N/A 750,000
-0- 15 months N/A N/A 450,000(5)
Robert J. Levenson.......... -0- 4 years 137,500 N/A 750,000
</TABLE>
- --------
(1) The Company's long-term incentives are not based on shares, units or
rights. Under the terms of the plan, at the end of a two-year award
period, a unit value is established for each executive based on the
performance of the Company's Common Stock as compared to the performance
of companies in the S&P 500 Index, subject to the Committee's discretion
to reduce the award produced by the formula based on factors it determines
in its discretion. Those unit values are banked for an additional two-year
period, during which time the amount will be increased by a percentage
equal to 50% of stockholders' return on equity each year, or, if return on
equity is negative, decreased by a percentage equal to 100% of the
Stockholders' return on equity percentage. For the two-year award period
ended December 31, 1997, the formula produced a unit value of $0 for each
of the Named Executives.
(2) Two thresholds must be met before any unit value is established for any of
the Named Executives. First, the growth in the rate of total stockholders'
return must exceed the average two-year treasury note interest rate for
the 60-day period prior to the performance period. Second, no unit value
is established if the percentage increase in the Common Stock price, plus
dividends, does not exceed the percentage increase of at least 50% of the
companies in the S&P Index. Amounts shown are the unit values which would
be established under the plan formula applicable to each executive if the
thresholds are met, but not exceeded. As noted in footnote (1), these
amounts will increase or decrease during the two-year period after they
are set based on the Company's return on equity.
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(3) No performance level or pay level has been identified as a target.
(4) Amounts shown are the maximum unit values which may be established at the
end of the performance period. The ultimate payout is determined by the
Company 's return on equity over the two-year period after the unit value
is established, and may be greater or less than the amount shown. No limit
has been placed on the potential increase or decrease.
(5) The second award disclosed for Mr. Hoff is a special incentive
opportunity. In early 1996, Mr. Hoff and the Compensation Committee
determined that he would receive no annual bonus and no award under the
Shareholder Value Plan because of quality issues in his units. No amount
was banked for Mr. Hoff in 1996 for the prior two-year performance period.
In early 1997, however, the Committee reviewed the quality issues in Mr.
Hoff's business units and determined that there had been dramatic
improvement. It advised Mr. Hoff that if the improvement continued through
1997 and first quarter 1998, Mr. Hoff would be eligible for an award in
the Committee's discretion of up to $450,000 to be paid in 1998. See also
footnote (4) to the Summary Compensation Table.
RETIREMENT PLANS
The Company's defined benefit retirement plans were frozen in 1997. Mr.
Duques, Mr. Fote, and Mr. Hoff each have a frozen benefit which would provide
for an annual payment at age 65 of approximately $9,700, $82,100, and $7,500,
respectively. Mr. Adrean and Mr. Levenson do not have a benefit in the plans
because they joined the Company after participation was frozen. All of the
Company's executives participate in the Company's defined contribution plans.
The Company's contributions to the Named Executives' defined contribution
plans are shown in the "All Other Compensation" column of the Summary
Compensation Table.
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PERFORMANCE GRAPH
The following graph compares the yearly percentage change in cumulative
total stockholder return on the Common Stock of the Company since December 31,
1992 with the cumulative total return over the same period of (i) the S&P 500
Index, (ii) the S&P Computer Software Services Index ("CSSI"), and (iii) a
peer group selected by the Company composed of the following ten computer
services companies with market capitalizations over one billion dollars
(Automatic Data Processing Inc., Ceridian Corp., Computer Sciences Corp., DST
Systems Inc., Electronic Data Systems Corp., Equifax Inc., Fiserv Inc.,
Paychex Inc., Sunguard Data Systems Inc., and Total System Services Inc.) (the
"Peer Group").
In the Company's prior Proxy Statements, the S&P CSSI was used as the peer
group index. However, S&P removed the Company from the CSSI and created a new
S&P Services (Data Processing) Index composed of the Company, ADP, Ceridian
and Equifax. Because of these changes, the Company does not believe that the
S&P CSSI any longer reflects a representative peer group index. Due to the
small number of companies in the new S&P Services (Data Processing) Index, the
Company also does not believe that this Index provides an adequately
representative peer group. Therefore the Company has selected the ten computer
services companies listed above as a representative peer group index.
The S&P CSSI is shown in this year's Proxy Statement for transitional
purposes only as required by the Securities and Exchange Commission ("SEC")
rules. Pursuant to SEC rules, the comparison assumes $100 was invested on
January 1, 1993 in the Company's Common Stock and in each of the indices and
assumes reinvestment of dividends, if any. Also pursuant to SEC rules, the
returns of each of the companies in the Peer Group is weighted according to
the respective company's stock market capitalization at the beginning of each
period for which a return is indicated. Historic stock price is not indicative
of future stock price performance.
First Data CSSI S&P 500 Peer Group
- --------------------------------------------------------------------------------
12/31/92 100.00 100.00 100.00 100.00
12/31/93 118.94 127.63 110.08 102.90
12/31/94 138.64 150.87 111.54 126.96
12/31/95 196.10 212.03 153.45 178.05
12/31/96 214.32 329.63 188.69 188.76
12/31/97 172.13 459.17 251.64 226.28
20
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CERTAIN TRANSACTIONS AND OTHER MATTERS
In the ordinary course of business, the Company and its subsidiaries from
time to time engage in transactions with other corporations or financial
institutions whose officers or directors are also directors or officers of the
Company or a subsidiary. Transactions with such corporations and financial
institutions are conducted on an arm's-length basis and may not come to the
attention of the directors or officers of the Company or of the other
corporations or financial institutions involved.
RRE Investors
In December of 1995, the Company made a $3,000,000 limited partnership
investment in RRE Connect Investors, L.P. (the "Connect Partnership"). The
Connect Partnership invested these proceeds in securities of Connect, Inc. The
general partner of the Connect Partnership is RRE Partners LLC and the Connect
Partnership engaged RRE Advisors, LLC to manage the affairs of the Connect
Partnership. The Company is required to pay RRE Advisors, LLC an annual
management fee of 2% of its capital investment. In addition, the Limited
Partnership Agreement provides that the general partner is entitled to a 17%
carried interest in profits realized beyond the amount of the original
investment. In both 1996 and 1997, the Company paid a $60,000 annual
management fee to RRE Advisors, LLC. In August 1996, Connect, Inc. became a
publicly traded company. The Company's beneficial ownership of 1,136,363.4
shares of Connect, Inc. had a fair market value of $958,807 on December 31,
1997.
In the fourth quarter of 1996, the Company made a commitment to invest up to
$3 million as a limited partner in RRE Investors, L.P. (the "Investors
Partnership"). The Company is required to pay RRE Advisors, LLC an annual
management fee of 2% of its capital commitment as well as its pro rata share
of certain organizational and other expenses. In addition, the Limited
Partnership Agreement provides that the general partner is entitled to receive
20% of all distributions after satisfaction of certain distribution
preferences in favor of the limited partners. As of December 31, 1997, the
Company had funded $746,370 of the commitment and paid $49,025 in management
fees and organizational expenses.
Mr. Robinson and members of his family control and have equity interests in
RRE Investors, L.P., RRE Partners LLC and RRE Advisors, LLC (collectively, the
"RRE Entities"). Prior to authorizing the investments as described above, Mr.
Robinson disclosed his interests in the transactions to the Board and the
Board unanimously approved the investments.
InfiStar Corporation
InfiStar Corporation ("InfiStar," formerly Card Issuer Program Management
Corporation) was formed in 1995 by individuals who at the time were employees
of the Company or its subsidiaries. Subsidiaries of the Company and InfiStar
entered into an agreement under which those subsidiaries would be the
exclusive providers of processing services to customers of InfiStar. The
parties are severing the relationship because of an inability to reach
agreement on the pricing of the services to be provided. To settle the dispute
and in satisfaction of certain other claims, the Company paid InfiStar $8.5
million in 1996 and has agreed to pay monthly fees totaling $6 million through
June 1999 in exchange for the right to have InfiStar provide certain services
to the Company. The Company paid $2,291,666 under this agreement in 1997. Mr.
Russell owns approximately 7% of the outstanding shares of InfiCorp Holdings,
Inc. which owns 100% of InfiStar Corporation. Mr. Russell is a director and
performs consulting services for InfiStar Corporation and was paid $97,500 for
his services in 1997. In addition, in 1997 Mr. Russell was granted options to
purchase 2,000 shares of InfiCorp Holdings, Inc.
21
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of the
Company's Common Stock ("Section 16 Persons") to file reports of ownership and
changes in ownership in the Company's Common Stock with the Securities and
Exchange Commission and the New York Stock Exchange. Based on the Company's
records and other information, the Company believes that all Section 16(a)
filing requirements for the Section 16 Persons have been complied with during
or with respect to the fiscal year ended December 31, 1997.
PRINCIPAL HOLDERS OF COMMON STOCK
Based upon statements filed with the Securities and Exchange Commission
pursuant to Section 13(d) or 13(g) of the Securities Exchange Act of 1934, the
Company does not believe any person beneficially owned more than 5% of the
Company's outstanding Common Stock as of December 31, 1997.
* * *
You are urged to mark, date, sign and return the enclosed proxy in the
prepaid envelope provided for such purpose. Prompt return of your proxy may
save the Company the expense of a second mailing.
We encourage all stockholders to attend the Annual Meeting of Stockholders
on May 13, 1998. If, due to a disability, you desire this document in an
alternative, accessible format or you will need special assistance at the
meeting, please contact the Corporate Secretary.
HENRY C. DUQUES
Chairman
22
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FIRST DATA CORPORATION
1992 LONG-TERM INCENTIVE PLAN
(AS PROPOSED TO BE AMENDED AT THIS MEETING)
1. PURPOSE. The purpose of the 1992 Long-Term Incentive Plan (the "Plan") is
to advance the interests of First Data Corporation, a Delaware corporation
(the "Company") and its stockholders by providing incentives to certain key
employees of the Company, its Subsidiaries and its Affiliates and to certain
other key individuals who perform services for these entities, including those
who contribute significantly to the strategic and long-term performance
objectives and growth of the Company and its affiliates.
2. ADMINISTRATION. The Plan shall be administered solely by the Board of
Directors (the "Board") of the Company or, if the Board shall so designate, by
the Compensation and Benefits Committee (the "Committee") of the Board, as
such Committee is from time to time constituted, or any successor committee
the Board may designate to administer the Plan. The Committee may delegate the
administration of the Plan in whole or in part, on such terms and conditions,
and to such person or persons as it may determine in its discretion.
References to the Committee hereunder shall include the Board or the delegate
of the Committee where appropriate.
The Committee has all the powers vested in it by the terms of the Plan set
forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) to select the key employees and other key
individuals to be granted awards under the Plan ("Awards"), to determine the
type, size (pursuant to Paragraph 4(b)(ii)) and terms of the Award to be made
to each individual selected, to modify the terms of any Award that has been
granted, (provided that no such modification shall be made to increase the
size of any Award or accelerate the date of exercise of any Award and/or
payments thereunder), to determine the time when Awards will be granted to
establish performance objectives, to make any adjustments necessary or
desirable as a result of the granting of Awards to eligible individuals
located outside the United States and to prescribe the form of the instruments
embodying Awards made under the Plan. The Committee is authorized to interpret
the Plan and the Awards granted under the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan (provided that no such
amendment, rule or regulation shall be made to increase the amount of any
Award or accelerate the date of exercise of any Award and/or payments
thereunder), and to make any other determinations which it deems necessary or
desirable for the administration of the Plan. The Committee (or its delegate
as permitted herein) may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Award in the manner and to
the extent the Committee deems necessary or desirable to carry it into effect.
Any decision of the Committee (or its delegate as permitted herein) in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned.
3. PARTICIPATION. (a) Affiliates. If an Affiliate (as hereinafter defined)
of the Company wishes to participate in the Plan and its participation shall
have been approved by the Board upon the recommendation of the Committee, the
board of directors or other governing body of the Affiliate shall adopt a
resolution in form and substance satisfactory to the Committee authorizing
participation by the Affiliate in the Plan with respect to its key employees
or other key individuals performing services for it. As used herein, the term
"Affiliate" means any entity (other than a Subsidiary) in which the Company
has a substantial direct or indirect equity interest, as determined by the
Committee in its discretion.
An Affiliate participating in the Plan may cease to be a participating
company at any time by action of the Board or by action of the board of
directors or other governing body of such Affiliate, which latter action shall
be effective not earlier than the date of delivery to the Secretary of the
Company of a certified copy of a resolution of the Affiliate's board of
directors or other governing body taking such action. If the participation in
the Plan of an Affiliate shall terminate, such termination shall not relieve
it of any obligations theretofore incurred by it under the Plan, except as may
be approved by the Committee.
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(b) Participants. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein)
to select the key employees and other key individuals performing services
for the Company, its Subsidiaries and its Affiliates who may participate in
the Plan and be granted Awards under the Plan. Eligible individuals may be
selected individually or by groups or categories, as determined by the
Committee in its discretion. No non-employee director of the Company or any
of its Affiliates shall be eligible to receive an Award under the Plan.
4. AWARDS UNDER THE PLAN. (a) Types of Awards. Awards under the Plan may
include, but need not be limited to, one or more of the following types,
either alone or in any combination thereof: (i) "Stock Options," (ii)
"Restricted Stock," and (iii) Awards to be made to participants who are
foreign nationals or are employed or performing services outside the United
States. Stock Options, which include "Nonqualified Stock Options" which may be
awarded to participants, including purchased stock options which may be sold
to participants at a price determined by the Committee ("Purchased Options"),
in each case having an exercise price equal to the fair market value of the
Common Shares subject to such Option at the time the Option is granted or
sold, and incentive stock options as defined in Section 422 of the Code
("Incentive Stock Options") or combinations thereof, are rights to purchase
common shares of the Company having a par value of $.01 per share and stock of
any other class into which such shares may thereafter be changed (the "Common
Shares"). Nonqualified Stock Options and Incentive Stock Options are subject
to the terms, conditions and restrictions specified in Subparagraph 5. Shares
of Restricted Stock are Common Shares which are issued subject to certain
restrictions pursuant to Paragraph 6.
(b) Maximum Aggregate Number of Shares that May be Issued
(i) The maximum aggregate number of shares that may be issued under
the Plan (as Restricted Stock, pursuant to the exercise of Stock
Options, or in payment of or pursuant to the exercise of such other
Awards as the Committee, in its discretion, may determine) shall not
exceed 69,580,000 Common Shares, subject to adjustment as provided in
Paragraph 13, provided that no more than 12,000,000 Common Shares,
subject to adjustment as provided in Paragraph 13, may be issued as
Restricted Stock. Common Shares issued pursuant to the Plan may be
authorized but unissued shares, treasury shares, reacquired shares, or
any combination thereof. If any Common Shares issued as Restricted
Stock or otherwise subject to forfeiture rights are reacquired by the
Company pursuant to such rights, or if any Award is canceled,
terminates or expires unexercised, any Common Shares that would
otherwise have been issuable pursuant thereto will be available under
new Awards. Furthermore, any Common Shares or Options which are
tendered pursuant to the exercise of Stock Options also will be
available under new Awards.
(ii) In any fiscal year, the maximum number of shares that may be
issued to any individual in the aggregate (as Restricted Stock, as
grants of Stock Options, or in payment of such other Awards as the
Committee, in its discretion, may determine) shall be one-half of one-
percent of the outstanding shares of the Company as of the preceding
December 31.
(c) Rights with respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate for the number of Common
Shares awarded and prior to the expiration of the Restricted Period (as
hereinafter defined), ownership of such Common Shares, including the
right to vote the same and to receive dividends or other distributions
made or paid with respect to such Common Shares (provided that such
Common Shares, and any new, additional or different shares, or Other
Company Securities or property, or other forms of consideration which
the participant may be entitled to receive with respect to such Common
Shares as a result of a stock split, stock dividend or any other change
in the corporation or capital structure of the Company, shall be
subject to the restrictions hereinafter described as determined by the
Committee in its
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discretion), subject, however, to the restrictions and limitations
imposed thereon pursuant to the Plan. Notwithstanding the foregoing, a
participant with whom an Award agreement is made to issue Common Shares
in the future, shall have no rights as a stockholder with respect to
Common Shares related to such agreement until issuance of a certificate
to him.
(ii) Unless otherwise determined by the Committee in its discretion,
a participant to whom a grant of Stock Options or any other Award is
made (and any person succeeding to such a participant's rights pursuant
to the Plan) shall have no rights as a stockholder with respect to any
Common Shares or as a holder with respect to other securities, if any,
issuable pursuant to any such Award until the date of the issuance of a
stock certificate to him for such Common Shares or other instrument of
ownership, if any. Except as provided in Paragraph 13, no adjustment
shall be made for dividends, distributions or other rights (whether
ordinary or extraordinary, and whether in cash, securities, other
property or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock certificate
or other instrument of ownership, if any, is issued.
5. STOCK OPTIONS. The Committee may grant or sell Stock Options either
alone, or in conjunction with other Awards, either at the time of grant or by
amendment thereafter; provided that an Incentive Stock Option may be granted
only to an eligible employee of the Company or its parent or any Subsidiary.
Each Stock Option (referred to herein as an "Option") granted or sold under
the Plan shall be evidenced by an instrument in such form as the Committee
shall prescribe from time to time in accordance with the Plan and shall comply
with the following terms and conditions, and with such other terms and
conditions, including, but not limited to, restrictions upon the Option or the
Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:
(a) The option exercise price may be not less than the fair market value
of the Common Shares subject to such Option at the time the Option is
granted. Options granted as Incentive Stock Options shall comply with the
then-current rules relating to Incentive Stock Options.
(b) The Committee shall determine the number of Common Shares to be
subject to each Option. The number of Common Shares subject to an
outstanding Option may be reduced on a share-for-share or other appropriate
basis, as determined by the Committee, to the extent that any other award
granted in conjunction with such Option is paid.
(c) Unless the Committee determines otherwise, the Option shall not be
exercisable for at least six months after the date of grant, unless the
grantee ceases employment or performance of services before the expiration
of such six-month period by reason of his disability as defined in
Paragraph 10 or his death.
(d) The Option shall not be exercisable:
(i) unless payment in full is made for the shares being acquired
thereunder at the time of exercise; such payment shall be made in cash,
Common Shares, or such other form (including, but not limited to the
surrender of another outstanding Award under the Plan) as the Committee
may determine in its discretion; and
(ii) unless the person exercising the Option has been, at all times
during the period beginning with the date of the grant of the Option
and ending on the date of such exercise, employed by or otherwise
performing services for the Company or an Affiliate, or a corporation,
or a parent or Subsidiary of a corporation, substituting or assuming
the Option in a transaction to which Section 424(a) of the Internal
Revenue Code of 1986, as amended, or any successor statutory provision
thereto (the "Code"), is applicable, except that
(A) in the case of any Nonqualified Stock Option, if such person
shall cease to be employed by or otherwise performing services for
the Company or an Affiliate solely by reason of a period
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of Related Employment as defined in Paragraph 12, he may, during
such period of Related Employment, exercise the Nonqualified Stock
Option as if he continued such employment or performance of
services; or
(B) if such person shall cease such employment or performance of
services by reason of his disability as defined in Paragraph 10 or
early, normal or deferred retirement under an approved retirement
program of the Company or an Affiliate (or such other plan or
arrangement as may be approved by the Committee, in its discretion,
for this purpose) while holding an Option which has not expired and
has not been fully exercised, such person, at any time within three
years (or such other period determined by the Committee) after the
date he ceased such employment or performance of services (but in no
event after the Option has expired), may exercise the Option with
respect to any shares as to which he could have exercised the Option
on the date he ceased such employment or performance of services, or
with respect to such greater number of shares as determined by the
Committee; or
(C) if such person shall cease such employment for performance of
services by reason of his involuntary termination other than For
Cause as defined in Section 15(1) while holding an Option which has
not expired and has not been fully exercised, such person, at any
time within 90 days after the date he ceased such employment or
performance of services (but in no event after the option has
expired), may exercise the Option with respect to any shares as to
which he could have exercised the Option on the date he ceased such
employment or performance of services, or with respect to such
greater number of shares as determined by the Committee; or
(D) if any person to whom an Option has been granted shall die
holding an Option which has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, as
the case may be, may, at any time within one year (or such other
period determined by the Committee) after the date of death (but in
no event after the Option has expired), exercise the Option with
respect to any shares as to which the decedent could have exercised
the Option at the time of his death, or with respect to such greater
number of shares as determined by the Committee.
(e) A Purchased Option may contain such additional terms not inconsistent
with this Plan, including but not limited to the circumstances under which
the purchase price of such Purchased Option may be returned to the
optionee, as the Committee may determine in its sole discretion.
6. RESTRICTED STOCK. Each Award of Restricted Stock under the Plan shall be
evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions as the
Committee, in its discretion, shall establish:
(a) The Committee shall determine the number of Common Shares to be
issued to a participant pursuant to the Award, and the extent, if any, to
which they shall be issued in exchange for cash, other consideration or
both.
(b) The Award agreement shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of the Plan:
(i) for the vesting of the Common Shares subject to such Award if specified
performance measures are satisfied or met during the Restricted Period (as
defined in Subparagraph 6(c)) or if the participant holding such Award
remains in continuous employment with or performance of services for the
Company or an Affiliate during the Restricted Period; (ii) and for the
forfeiture of such Common shares if specified performance measures are not
satisfied or met during the Restricted Period or if the participant holding
such Award does not remain in continuous employment with or performance of
services for the Company or an Affiliate during the Restricted Period.
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(c) Common Shares issued to a participant in accordance with the Award
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution, or as
otherwise determined by the Committee, for such period as the Committee
shall determine, from the date on which the Award is granted (the
"Restricted Period"). Any attempt to dispose of any such Common Shares
shall be null and void and without effect. Each certificate for Common
Shares issued pursuant to a Restricted Stock Award may bear an appropriate
legend referring to the Restricted Period; shall be deposited with the
Company, together with a stock power or other instrument of assignment
(including a power of attorney) endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company, which would
permit transfer to the Company of all or a portion of the Common Shares
subject to such Award in the event such Award is forfeited in whole or in
part; or shall be evidenced in such other manner permitted by applicable
law as determined by the Committee in its discretion. Upon termination of
any applicable Restricted Period (and the satisfaction or attainment of
applicable performance measures), subject to the Company's right to require
payment of any taxes in accordance with Subparagraph 15(e), a certificate
or certificates evidencing ownership of the requisite number of Common
Shares shall be delivered to the participant.
(d) Unless otherwise set forth in an Award agreement, if a participant
who has been in continuous employment or performance of services for the
Company or an Affiliate since the date on which a Restricted Stock Award
was granted to him shall, while in such employment or performance of
services, die, or terminate such employment or performance of services by
reason of disability as defined in Paragraph 10 or by reason of early,
normal or deferred retirement under an approved retirement program of the
Company or an Affiliate (or such other plan or arrangement as may be
approved by the Committee in its discretion, for this purpose) and any of
such events shall occur after the date on which the Award was granted to
him and prior to the end of the Restricted Period of such Award, the
Committee may, in its discretion, determine to terminate the remainder of
the Restricted Period on any or all of the Common Shares subject to such
Award.
(e) The minimum Restricted Period for Restricted Stock shall be one year.
(f) Awards of Restricted Stock may be made in the form of Phantom Stock.
For purposes of this Subparagraph 6(f), Phantom Stock shall mean an
instrument which provides for a cash payment which is equivalent to the
fair market value of the number of Common Shares of the Company equal to
the number of shares of Phantom Stock granted, which fair market value
shall be determined as of the date upon which restrictions on the Phantom
Stock lapse and, in the discretion of the Committee, a cash payment or
payments which are equivalent to the dividends on such number of Common
Shares during the period from the date of grant of such Phantom Stock until
such lapse of restrictions.
7. DEFERRAL OF COMPENSATION. The Committee shall determine whether or not an
Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not
such deferred amounts may be
(i) forfeited to the Company or to other participants or any
combination thereof, under certain circumstances (which may include,
but need not be limited to, certain types of termination of employment
or performance of services for the Company and its Affiliates),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures, and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until
the date or dates of payment of the Award, if any.
8. DEFERRED PAYMENT OF AWARDS. The Committee may specify that the payment of
all or any portion of cash, Common Shares, Other Company Securities or
property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such
periods or until the
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occurrence of such events, and upon such terms, as the Committee shall
determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of
certain investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but
need not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents
to be determined by the Committee in its discretion.
9. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (provided
that no such amendment may increase the amount of any Award or accelerate the
date of exercise of any Award and for payments thereunder). No such amendment
shall adversely affect in material manner any right of a participant under the
Award without his written consent, unless the Committee determines in its
discretion that there have occurred or are about to occur significant changes
in the participant's position, duties or responsibilities, or significant
changes in economic, legislative, regulatory, tax, accounting or cost/ benefit
conditions which are determined by the Committee in its discretion to have or
to be expected to have a substantial effect on the performance of the Company,
or any Subsidiary, Affiliate, division or department thereof, on the Plan or
on any Award under the Plan. The Committee may, in its discretion, permit
holders of Awards under the Plan to surrender outstanding Awards in order to
exercise or realize the rights under other Awards, or in exchange for the
grant of new Awards, or require holders of Awards to surrender outstanding
Awards as a condition precedent to the grant of new Awards under the Plan.
10. DISABILITY. For the purposes of this Plan, a participant shall be deemed
to have terminated his employment or performance of services for the Company
and its Affiliates by reason of disability, if the Committee shall determine
that the physical or mental condition of the participant by reason of which
such employment or performance of services terminated was such at that time as
would entitle him to payment of monthly disability benefits under the
Company's Long-Term Disability Plan, or, if the participant is not eligible
for benefits under such plan, under any similar disability plan of the Company
or an Affiliate in which he is a participant. If the participant is not
eligible for benefits under any disability plan of the Company or an
Affiliate, he shall be deemed to have terminated such employment or
performance of services by reason of disability if the Committee shall
determine that his physical or mental condition would entitle him to benefits
under the Company's Long-Term Disability Plan if he were eligible therefor.
11. TERMINATION OF A PARTICIPANT. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment
with, or the performance for services for, the Company and its Affiliates;
provided, however, that transfers between the Company and an Affiliate or
between Affiliates, and approved leaves of absence shall not be deemed such a
termination.
12. RELATED EMPLOYMENT. For the purposes of this Plan, Related Employment
shall mean the employment or performance of services by an individual for an
employer that is neither the Company nor an Affiliate, provided that (i) such
employment or performance of services is undertaken by the individual at the
request of the Company or an Affiliate, (ii) immediately prior to undertaking
such employment or performance of services, the individual was employed by or
performing services for the Company or an Affiliate or was engaged in Related
Employment as herein defined and (iii) such employment or performance of
services is in the best interests of the Company and is recognized by the
Committee, in its discretion, as Related Employment for purposes for this
Paragraph 12. The death or disability of an individual or his or her
involuntary termination of employment during a period of Related Employment as
herein defined shall be treated, for purposes of this Plan, as if the death or
onset of disability had occurred while the individual was employed by or
performing services for the Company or an Affiliate.
13. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Common Shares of the Company by reason of any stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination or exchange of
shares, a sale by the Company of all
A-6
<PAGE>
of its assets, any distribution to stockholders other than a normal cash
dividend, or other extraordinary or unusual event, if the Committee shall
determine, in its discretion, that such change equitably requires an
adjustment in the terms of any Award or the number of Common Shares available
for Awards, such adjustment may be made by the Committee and shall be final,
conclusive and binding for all purposes of the Plan.
14. DESIGNATION OF BENEFICIARY BY PARTICIPANT. A participant may name a
beneficiary to receive any payment to which he may be entitled in respect of
any Award under the Plan in the event of his death, on a written form to be
provided by and filed with the Committee, and in a manner determined by the
Committee in its discretion. The Committee reserves the right to review and
approve beneficiary designations. A participant may change his beneficiary
from time to time in the same manner, unless such participant has made an
irrevocable designation. Any designation of beneficiary under the Plan (to the
extent it is valid and enforceable under applicable law) shall be controlling
over any other disposition, testamentary or otherwise, as determined by the
Committee in its discretion. If no designated beneficiary survives the
participant and is living on the date on which any amount becomes payable to
such a participant's beneficiary, such payment will be made to the legal
representatives of the participant's estate, and the term "beneficiary" as
used in the Plan shall be deemed to include such person or persons. If there
is any question as to the legal right of any beneficiary to receive a
distribution under the Plan, the Committee in its discretion may determine
that the amount in question be paid to the legal representatives of the estate
of the participant, in which event the Company, the Board and the Committee
and the members thereof, will have no further liability to anyone with respect
to such amount.
15. MISCELLANEOUS PROVISIONS.
(a) No employee or other person shall have any claim or right to be
granted an Award under the Plan. Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
individuals under the plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall
be construed as giving any employee or any other person any right to
continue to be employed by or perform services for the Company or any
Affiliate, and the right to terminate the employment of or performance of
services by any participants at any time and for any reason is specifically
reserved.
(b) No participant or other person shall have any right with respect to
the Plan, the Common Shares reserved for issuance under the Plan or in any
Award, contingent or otherwise, until written evidence of the Award shall
have been delivered to the recipient and all the terms, conditions and
provisions of the Plan and the Award applicable to such recipient (and each
person claiming under or through him) have been met.
(c) Except as may be approved by the Committee where such approval shall
not adversely affect compliance of the Plan with Rule 16b-3 under the
Exchange Act, a participant's rights and interest under the Plan may not be
assigned or transferred, hypothecated or encumbered in whole or in part
either directly or by operation of law or otherwise (except in the event of
a participant's death) including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner;
provided, however, that any Option or similar right offered pursuant to the
Plan shall not be transferable other than by will or the laws of descent
and distribution and shall be exercisable during the participant's lifetime
only by him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder
with respect to any Award unless counsel for the Company shall be satisfied
that such issuance will be in compliance with applicable federal, state,
local and foreign legal, securities exchange and other applicable
requirements.
(e) The Company and its Affiliates shall have the right to deduct from
any payment made under the Plan any federal, state, local or foreign income
or other taxes required by law to be withheld with respect to such payment.
It shall be a condition to the obligation of the Company to issue Common
Shares, Other Company Securities or property, other securities or property,
or other forms of payment, or any combination
A-7
<PAGE>
thereof, upon exercise, settlement or payment of any Award under the Plan,
that the participant (or any beneficiary or person entitled to act) pay to
the Company, upon its demand, such amount as may be required by the Company
for the purpose of satisfying any liability to withhold federal, state,
local or foreign income or other taxes. If the amount requested is not
paid, the Company may refuse to issue Common Shares, Other Company
Securities or property, other securities or property, or other forms of
payment, or any combination thereof. Notwithstanding anything in the Plan
to the contrary, the Committee may, in its discretion, permit an eligible
participant (or any beneficiary or person entitled to act) to elect to pay
a portion or all of the amount requested by the Company for such taxes with
respect to such Award, at such time and in such manner as the Committee
shall deem to be appropriate (including, but not limited to, by authorizing
the Company to withhold, or agreeing to surrender to the Company on or
about the date such tax liability is determinable, Common Shares, Other
Company Securities or property, other securities or property, or other
forms of payment, or any combination thereof, owned by such person or a
portion of such forms of payment that would otherwise be distributed, or
have been distributed, as the case may be, pursuant to such Award to such
person, having a fair market value equal to the amount of such taxes).
(f) The expenses of the Plan shall be borne by the Company. However, if
an Award is made to an individual employed by or performing services for an
Affiliate,
(i) if such Award results in payment of cash to the participant, such
Affiliate shall pay to the Company an amount equal to such cash
payment; and
(ii) if the Award results in the issuance by the Company to the
participant of Common Shares, Other Company Securities or property,
other securities or property, or other forms of payment, or any
combination thereof, such Affiliate shall pay to the Company an amount
equal to the fair market value thereof, as determined by the Committee,
on the date such shares, Other Company Securities or property, other
securities or property, or other forms of payment, or any combination
thereof, are issued (or, in the case of the issuance of Restricted
Stock or of Common Shares, Other Company Securities or property, or
other securities or property, or other forms of payment subject to
transfer and forfeiture conditions, equal to the fair market value
thereof on the date on which they are no longer subject to applicable
restrictions), minus the amount, if any, received by the Company in
respect of the purchase of such Common Shares, Other Company Securities
or property, other securities or property or other forms of payment, or
any combination thereof.
(g) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Award under the Plan, and rights to the
payment of Awards shall be no greater than the rights of the Company's
general creditors.
(h) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board
or the Committee or its delegates.
(i) Fair market value in relation to Common Shares as of any specific
time shall mean such value as determined by the Committee in accordance
with applicable law.
(j) The masculine pronoun includes the feminine and the singular includes
the plural wherever appropriate.
(k) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the
Plan and to Awards granted under the Plan, shall be governed by the
substantive laws, but not the choice of law rules, of the State of
Delaware.
(l) The term "For Cause" as referred to in any Awards granted under the
Plan shall mean (i) willful misconduct, (ii) dishonesty, (iii)
insubordination, (iv) conviction of a felony or its equivalent under local
law, (v) gross negligence in the performance of a Participant's employment
duties, (vi) failure to abide by
A-8
<PAGE>
instructions received from the Board of Directors of the Company or its
delegates, (vii) the material or repeated violation of policies and
practices adopted by the Company, including the First Data Corporation Code
of Conduct or (viii) use of illegal drugs or controlled substances or the
illegal use of controlled substances. Any decision of the Committee in the
interpretation and administration of the Plan shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all
parties.
(m) The term "Subsidiary" means any corporation (or partnership,
alliance, joint venture, or other enterprise) of which the Company owns or
controls, directly or indirectly, 50% or more of the outstanding shares of
stock normally entitled to vote for the election of directors (or
comparable equity participation and voting power).
16. PLAN AMENDMENT OR SUSPENSION. The Plan may be amended or suspended in
whole or in part at any time from time to time by the Board. No amendment of
the Plan shall adversely affect in a material manner any right of any
participant with respect to any Award theretofore granted without such
participant's written consent, except as permitted under Paragraph 9.
17. PLAN TERMINATION. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the Plan;
or
(b) ten years from the date the Plan was initially approved and adopted;
provided, however, that the Board may, prior to the expiration of such ten-
year period, extend the term of the Plan for an additional period of up to
five years for the grant of Awards other than Incentive Stock Options. No
termination of the Plan shall materially alter or impair any of the rights
or obligations of any person, without his consent, under any Award
theretofore granted under the Plan, except that subsequent to termination
of the Plan, the Committee may make amendments permitted under Paragraph 9.
18. COMPLIANCE WITH STATE AND FEDERAL LAW IN AUSTRALIA. The obligation of
the Company to carry out the terms of this Agreement is subject to the
condition precedent that they be carried out and are able to be carried out in
full compliance with all requirements of State and Federal Law in Australia.
A-9
<PAGE>
FIRST DATA CORPORATION PROXY
________________________________________________________________________________
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 13, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST DATA CORPORATION (FDC)
I hereby appoint Henry C. Duques and Michael T. Whealy, as Proxies, each
with the power to appoint his substitute, and hereby authorize them to represent
and to vote, as designated below, all the shares of Common Stock of FDC held of
record by me on March 16, 1998, at the Annual Meeting of Stockholders of FDC and
at any adjournment or postponement thereof, in the manner specified below.
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1 - Election of Directors [_] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
except as marked to the contrary below to vote for all nominees listed below
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.
BEN BURDETSKY HENRY C. DUQUES JOAN E. SPERO
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF THE DIRECTORS INDICATED AND FOR APPROVAL OF THE PROPOSALS
PRESENTED.
(continued, and to be signed and dated, on the reverse side)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
(continued from reverse side)
ITEM 2 - The approval of an increase in the number of shares issuable under the
Company's 1992 Long-Term Incentive Plan by 22,000,000 shares of the
Company's Common Stock.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 3 - The ratification of the selection of Ernst & Young LLP as independent
auditors of the Company for 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 4 - In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting. Management presently
is not aware of any such matters to be presented for action.
[_] FOR [_] AGAINST [_] ABSTAIN
________________________________________
SIGNATURE DATE
________________________________________
SIGNATURE IF HELD JOINTLY DATE
PLEASE SIGN exactly as name appears to
the left. Joint owners should each
sign. Executors, administrators,
trustees, etc. should so indicate when
signing. If signer is a corporation,
please sign full name by duly authorised
officer.
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THIS CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
<PAGE>
FIRST DATA CORPORATION PROXY
________________________________________________________________________________
EMPLOYEE PROXY VOTING CARD IN CONNECTION WITH THE FIRST DATA CORPORATION
INCENTIVE SAVINGS PLAN (ISP) / EMPLOYEE STOCK PURCHASE PLANS (SPPs)
/ RESTRICTED STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST DATA CORPORATION (FDC)
VOTING AUTHORIZATION FOR ISP SHARES - I hereby instruct The Dreyfus Trust
Company (Dreyfus), as Trustee under the FDC ISP, to vote, in person or by proxy,
all shares of Common Stock of FDC allocated to my account under the ISP at the
Annual Meeting of Stockholders of FDC to be held May 13, 1998, and at any
postponement or adjournment thereof, in the manner specified below. Dreyfus will
vote the ISP shares represented by this voting instruction if properly completed
and signed by me and received back by May 8, 1998. The ISP Trust Agreement
instructs Dreyfus to vote FDC shares allocated to my ISP account for which
Dreyfus has not received instructions from me in the same proportion on each
issue as it votes those shares credited to participants' accounts for which
Dreyfus received instructions from participants.
VOTING AUTHORIZATION FOR SPP SHARES AND RESTRICTED STOCK - I hereby appoint
Henry C. Duques and Michael T. Whealy, as Proxies, each with the power to
appoint his substitute, and hereby authorize them to represent and to vote, as
designated below, all the shares of Common Stock of FDC beneficially held by me
in the SPP or as restricted stock on March 16, 1998, at the Annual Meeting of
Stockholders of FDC and at any adjournment or postponement thereof, in the
manner specified below. With respect to SPP Shares and Restricted Stock, this
Proxy, when properly executed, will be voted as directed by the undersigned
stockholder. If no direction is given, this Proxy will be voted for the election
of the Directors indicated and for the approval of all Proposals presented.
(continued, and to be signed and dated, on the reverse side)
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Share Information -> Shown in this box are the number of shares of FDC stock, if
any, beneficially held for you:
(1) in the ISP,
(2) in the SPP, and
(3) as Restricted Stock
as of March 16, 1998 Record Date. Shares held in the ISP were provided by The
Dreyus Trust Company.
Shares held in the Stock Purchase Plan were provided by Salomon Smith Barney.
Shares of Restricted Stock were provided by FDC Stock Plan Administration.
By completing and mailing the attached card in time for delivery before May 8,
1998, you will have voted all of your ISP, SPP and Restricted Stock shares.
If you own FDC shares outside of these Plans, you will receive separate proxy
materials which you should complete and return in the envelope provided with
those materials.
- --------------------------------------------------------------------------------
(continued from reverse side)
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1 - Election of Directors [_] FOR all nominees listed below [_] WITHHOLD AUTHORITY
except as marked to the contrary below to vote for all nominees listed below
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.
BEN BURDETSKY HENRY C. DUQUES JOAN E. SPERO
Item 2 - The approval of an increase in the number of shares issuable under the
Company's 1992 Long-Term Incentive Plan by 22,000,000 shares of the
Company's Common Stock.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 3 - The ratification of the selection of Ernst & Young LLP as independent
auditors of the Company for 1998.
[_] FOR [_] AGAINST [_] ABSTAIN
Item 4 - In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting. Management presently
is not aware of any such matters to be presented for action.
[_] FOR [_] AGAINST [_] ABSTAIN
________________________________________
SIGNATURE DATE
________________________________________
SIGNATURE IF HELD JOINTLY DATE
PLEASE SIGN exactly as name appears to
the left. Joint owners should each sign.
Executors, administrators, trustees,
etc. should so indicate when signing. If
signer is a corporation, please sign
full name by duly authorised officer.
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN THIS CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
