I. Purpose and Organization
The purpose of the Compensation and Benefits Committee of the Board of Directors of First Data Corporation is to (i) discharge the Board's responsibilities relating to compensation of the Corporation's directors, executive officers and such other employees as the Committee may determine ("management") and the employee benefit plans and programs sponsored or maintained by the Corporation and its control group subsidiaries, and (ii) produce an annual report on executive compensation for inclusion in the Corporation's proxy statement, in accordance with the rules and regulations of the Securities and Exchange Commission.
The Committee shall consist of three or more members of the Board, each of whom the Board has determined has no material relationship with the Corporation and each of whom is otherwise "independent" under the rules of the New York Stock Exchange, Inc. Members and the Chairperson shall be appointed by the Board for such term as the Board may determine, and shall serve at the pleasure of the Board.
In order to discharge its responsibilities, the Committee shall each year establish a schedule of meetings; additional meetings may be scheduled as required.
A quorum at any Committee meeting shall be at least two members. All determinations of the Committee shall be made by a majority of its members present at a meeting duly called and held, except as provided herein (or where only two members are present, by unanimous vote). Any decision or determination of the Committee reduced to writing and signed by all of the members of the Committee shall be fully as effective as if it had been made at a meeting duly called and held.
The Chairperson of the Committee shall be responsible for establishing the agendas for meetings of the Committee. An agenda, together with materials relating to the subject matter of each meeting, shall be sent to members of the Committee prior to each meeting. Minutes for all meetings of the Committee shall be prepared to document the Committee's discharge of its responsibilities. The minutes shall be circulated in draft form to all Committee members to ensure an accurate final record, shall be approved at a subsequent meeting of the Committee and shall be distributed periodically to the full Board of Directors. The Committee shall make regular reports to the Board of Directors.
II. Committee Duties and Responsibilities
The Committee shall have the following duties and responsibilities:
1. In consultation with senior management, establish the Corporation's general compensation philosophy, and oversee the development and implementation of compensation programs.
2. The Board has ultimate responsibility for determining the goals and objectives of the Corporation and for the Chief Executive Officer as well as evaluating the CEO's performance. To assist the Board in discharging that responsibility and with input from the Board, the Committee shall review and approve corporate goals and objectives relevant to the compensation of the CEO and other management, evaluate the performance of the CEO and other management in light of those goals and objectives, and set the CEO's and other management's compensation level based on this evaluation. In determining the long-term incentive component of CEO compensation, the Committee shall consider, among other factors, the Corporation's performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the CEO in past years.
3. Administer and interpret all salary and incentive compensation plans for officers, management and other key employees, including but not limited to, awarding, implementing, and interpreting grants and other specific awards under First Data Corporation's 1992 and 2002 Long-Term Incentive Plans, comparable plans or their successor plans; reviewing senior management compensation; reviewing management organization, development and succession planning; and taking any actions necessary or advisable to establish or maintain the legal status of such plans.
4. Take any and all actions relating to employee benefit, compensation, and fringe benefit plans, programs, or policies of the Corporation and its control group subsidiaries, wherever located or incorporated, that are deemed appropriate by the Committee, including, but not limited to, establish, adopt, implement, amend, terminate, freeze, merge, transfer and interpret such employee benefit, compensation, and fringe benefit plans, programs, and policies and associated trusts; select any advisors, trustees, investment managers, consultants, insurers, and third-party administrators with respect to the plans and associated trusts; and take any and all actions necessary or appropriate, in the Compensation Committee's discretion, to establish or maintain the legal and/or tax qualified status of the plans and associated trusts.
5. 5. Establish committee(s) and subcommittee(s) comprised of employees of the Corporation or its control group subsidiaries (each of whom shall be qualified by training or experience to exercise their delegated responsibilities) and (i) delegate to such committee(s) or subcommittee(s) all or any portion of the Compensation Committee's authority and responsibility with respect to employee benefit plans and programs sponsored or maintained by the Corporation and/or its control group subsidiaries, except duties or responsibilities regarding specific awards to any director or executive officer of the Corporation subject to Section 16 of the Securities Exchange Act of 1934, (ii) appoint or terminate members of such committee(s) and subcommittee(s), and (iii) monitor the activities and performance of the committee(s) and subcommittee(s).
6. Oversee regulatory compliance with respect to compensation matters, including overseeing the Corporation's policies on structuring compensation programs to preserve tax deductibility.
7. Review and approve any severance or similar termination payments proposed to be made to any current or former executive officer of the Corporation.
8. Prepare the report on executive compensation required by the rules of the Securities and Exchange Commission to be included in the Corporation's annual proxy statement and any other Committee report required by applicable securities laws or stock exchange requirements.
9. Report the activities of the Committee to the Board of Directors on a regular basis and review issues with the Board as the Committee deems appropriate.
10. Prepare and review with the Board an annual performance evaluation of the Committee in a manner consistent with the directions of the Corporate Governance Committee.
III. Delegation to Subcommittee
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
IV. Resources and Authority of the Committee
The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management. With respect to compensation consultants retained to assist in the evaluation of director, CEO or senior executive compensation, this authority shall be vested solely in the Committee.