| | Internal Equity. The Committee also reviews internal reports on named executive base salaries and incentive plan targets compared to internal peers. To maintain a fair balance throughout the executive level at the Company, we strive for a level of consistency in compensation. Differences in compensation are based on degree of judgment associated with and the strategic nature of particular executive roles, as well as individual performance measured both objectively and subjectively. For 2017, our CEO’s total target direct compensation (base salary,
| target annual bonus award, and target long-term incentive award excluding any EPP payouts) was approximately 2.4 times that of the next highest-paid named executive. The Committee considers this an appropriate ratio, taking into account our CEO’s overall leadership responsibility, the
|
| | competitive market compensation rate for CEO talent, the strategic nature of the CEO position as the senior executive leading the organization, the extent and scope of his responsibilities, his performance and his additional role as Chairman of the Board of Directors.
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TheIn 2018, the Committee also considersconsidered recommendations from our Chairman and CEO, our President andExecutive Chairman, COO, and our Executive Vice President, Chief Administration Office & Chief Human Resources Officer,CHRO when establishing compensation levels for named executives other than the CEO. The CEO and management dothe Executive Chairman. Management does not participate in any Committee discussions about CEO and Executive Chairman compensation, except that the Executive Chairman participates in Committee discussions about CEO compensation. No member of management provides recommendations regarding his or her own compensation.
| 2017 2018 Executive Compensation Program Details |
| Base Salaries for 20172018 |
We attempt to set base salaries at a level competitive with our peer group. This helps us attract and retain top quality executive talent, while keeping our overall fixed costs at a reasonable level. For 2017,2018, the Committee approved these base salaries for our named executives: | | | | | | | | | | | Summary of 2017 Base Salary Actions | Named Executive | | Effective Date of Most Recent Base Salary Action | | | Base Salary on December 31, 2017 | | | Rationale for Base Salary Actions | William Nuti | | | August 8, 2005 | | | $ | 1,000,000 | | | No Change | Robert Fishman | | | March 26, 2016 | | | $ | 625,000 | | | No Change | Mark Benjamin | | | October 17, 2016 | | | $ | 750,000 | | | No Change | Paul Langenbahn | | | January 1, 2017 | | | $ | 600,000 | | | Promotion to Executive Vice President, Global Software | Robert Ciminera | | | January 1, 2017 | | | $ | 500,000 | | | Promotion to Executive Vice President, Hardware Product Operations | Michael Bayer | | | January 1, 2017 | | | $ | 575,000 | (1) | | Competitive position and additional responsibilities |
| | | | | | | | | | | Summary of 2018 Base Salary Actions | Named Executive | | Effective Date of Most Recent Base Salary Action | | | Base Salary on December 31, 2018 | | | Rationale for Base Salary Actions | Michael Hayford | | | April 30, 2018 | | | $ | 1,000,000 | | | New Hire – Competitive position | Frank Martire | | | May 31, 2018 | | | $ | 750,000 | | | New Hire – Competitive position | Owen Sullivan | | | July 23, 2018 | | | $ | 725,000 | | | New Hire – Competitive position | Andre Fernandez | | | August 29, 2018 | | | $ | 625,000 | | | New Hire – Competitive position | Daniel Campbell | | | February 5, 2018 | | | $ | 575,000 | | | New Hire – Competitive position | William Nuti | | | August 8, 2005 | | | $ | 1,000,000 | (1) | | No Change | Robert Fishman | | | March 26, 2016 | | | $ | 625,000 | (1) | | No Change |
(1) Mr. Bayer’s annualAnnual salary as in effect on September 29, 2017 (the date of his separation from service)retirement (Mr.Nuti) or position change (Mr.Fishman). | Annual Incentives for 20172018 |
| | Annual Incentive Plan Opportunity for 20172018 |
The 2017Except as noted below, the 2018 Annual Incentive Plan opportunity for our named executives was comprised of our:
| | | | | | | | | Management Incentive Plan Bonus
| | + | | Customer Success Bonus |
Mr. Benjamin, Mr. LangenbahnPer the negotiated terms of each of their respective new hire employment agreements, Messrs. Hayford, Martire, Sullivan and Mr. BayerFernandez each received a 2018 annual bonus payout of no less than target,pro-rated for their period of 2018 service. Messrs. Hayford’s and Martire’s new hire employment agreements also provided that their full 2018 annual incentives were under the Management Incentive Bonus, without participation in the Customer Success Bonus. Given the timing of their hiring in 2018, the new hire employment agreements of Messrs. Sullivan and Fernandez provided for guaranteed attainment of the Customer Success Bonus for 2018. These bonus terms were negotiated as part of total cash since these executives had an additionalnot participated in establishing either the strategy or the metrics for the 2018 bonus. These new hire bonus commitments apply only in 2018, the first year of service for these named executives. They do not reflect a change in ourpay-for-performance philosophy with respect to our annual incentive plan opportunityprogram. These executives do not have any minimum or guaranteed bonuses for 2017, as described in theSoftware & Cloud Cash Bonus Uplift Program – Stretch Objectives section below.2019.
| | Setting Annual Incentive Targets |
At the beginning of the performance year or upon hiring, the Committee generally establishes a total target bonus for each named executive as a percentage of base salary for purposes of both the Management Incentive Plan (“MIP”) and, where applicable, the Customer Success Bonus. This total target bonus percentage generally has three components: | · | | MIP—Core Financial Objectives Target Bonus, which is a target bonus percentage that is then multiplied by a Company-wide performance factor generated by achieving aNon-GAAP Operating Income (NGOI) core financial goal with a Free Cash Flow (FCF) modifier (the “Core Financial Objectives”); |
| · | | MIP—MIP—Individual Performance Modifier, which is a MIP percentage modifier based on each named executive’s achievement of individual performance goals (or “MBOs”); and
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| · | | Customer Success Target Bonus, which is the target bonus (10% for all named executives)) linked to the Company’s overall customer success survey results. |
| | Calculating Annual Incentive Awards |
The calculation of Annual Incentive Plan awards includes our MIP and Customer Success Bonus components (as applicable), as follows: Total Annual Incentive Plan Bonus Opportunity – 20172018 | | | | | | | | | | | | | | | | | | | | | Management Incentive Plan (MIP) | | | | Customer Success Bonus | | | | | | | | | | | | | | MIP Bonus Target (%) | | x | | Core Financial Objectives | | x | | Individual Performance Modifier | | + | | Payout Linked to Our Customer Success Survey Results | | = | | Actual Bonus Payout (%) | | | | | | | | | | | | | | (Range: 0% to 200%) | | | | (Range: (Range: 0% to 150%) | | | | (Range: 0% or 10%) | | | | |
| MIP Core Financial Objectives for 20172018 |
The Committee established the MIP Financial Objectives for 20172018 based on: | | | | | | | | | Non-GAAP Operating Income (NGOI) | | and | | Free Cash Flow |
For 2017,2018, the Committee retained NGOI as the primary Core Financial Objective. We use NGOI as the primary MIP bonus funding mechanism because it is: | · | | one of our key business imperatives –driving profitable growth by increasing revenue and controlling operating costs; |
| · | | balanced with driving a strong focus on asset utilization, working capital and cash flow; |
| · | | simple to calculate and easily understood by both employees and stockholders; |
| · | | a measure we can track throughout the year; and |
| · | | a critical measure investors use to assess our annual performance. |
The Committee retained Free Cash Flow as the other Core Financial Objective, which is used as a modifier to the MIP bonus funding mechanism once a target level of NGOI is achieved. We use Free Cash Flow because it: represents another one of our key business imperatives and critical performance measures;
| · | | represents another one of our key business imperatives and critical performance measures; |
tracks the resources available for the Company to invest in new technology and innovation that fuels future growth;
rewards the leadership team for maximizing our cash flow from operations; and
| · | | tracks the resources available for the Company to invest in new technology and innovation that fuels future growth; |
| · | | rewards the leadership team for maximizing our cash flow from operations; and |
encourages management to focus on working capital.
| · | | encourages management to focus on working capital. |
| | MIP Core Financial Objectives – Definitions and Impacts |
The 20172018 MIP Core Financial Objectives, including the definitions and impact of each, are shown in this chart: | | | | | | | | | | | MIP – Core Financial Objectives for 20172018 | Financial Objective | | Definition | | | | Impact on Our Financials | | | | Impact on Our Behavior | | | | | | | NGOI(1) | | Our income (loss) from operations as reported under generally accepted accounting principles in the United States, excluding certain special items as described in our annual financial report (see reconciliation on page 95103 of Form10-K – referred to as “segment operating income”). | | | | Profit (Loss) on our Income Statement (non-GAAP). | | | | Forces decision-making to produce results aligned to achieving our long-term strategic objectives. Management can be rewarded only when they drive profitable growth. | | | | | | | Free Cash Flow(1) | | Our net cash provided by operating activities and discontinued operations, less capital expenditures for property, plant and equipment, less additions to capitalized software, discretionary pension contributions and pension settlements (see reconciliation on page35-36 37 of Form10-K). | | | | Income Statement and Statement of Cash Flows(non-GAAP). | | | | Forces decision-making to provide available cash for investment in our existing businesses, strategic acquisitions and investments, repurchase of NCR stock, and repayment of debt obligations. |
(1) NGOI and Free Cash Flow arenon-GAAP measures. Income from operations and net cash provided by operating activities, respectively, are the most directly comparable GAAP measures. | | MIP Core Financial Objectives – 20172018 Performance Hurdles and Payout Cap |
As previously noted, based on feedback received from our investor outreach efforts, the Committee removed the minimum funding provision from the MIP for 2017, and returned to a more traditional funding approach. The threshold, target, and maximum funding levels of NGOI, if achieved, would result in preliminary funding of the MIP bonus at 40%, 100%, and 200%, respectively. Funding levels are interpolated between these points. No MIP funding occurs if results do not exceed the NGOI threshold. If NGOI exceeds target, accelerated funding occurs if the Free Cash Flow goal is also achieved. However, in no event can the 20172018 MIP funding exceed 200%.
On February 21, 2017,23, 2018, the Committee decided when establishing our 20172018 MIP that performance results would be determined on a constant currency basis to eliminate the impact of foreign currency fluctuations during the performance period, based on the same foreign exchange rates used to establish the Company’s 20172018 financial plan. | · | | NGOI Performance Threshold:Threshold: The Committee established an NGOI Performance Threshold of $920$855 million for 20172018 (before constant currency adjustment) before any MIP can be paid; this represents a 9.5%an increase over the Company’s2017 actual NGOI results of $840 million for 2016.$853 million. |
| · | | Free Cash Flow Hurdle: The Committee established a Free Cash Flow Target Performance Goal of $550$480 million for 2018, a 6% increase over 2017 Free Cash Flow, to be used as a modifier to the MIP bonus funding mechanism. |
The Committee’s establishment of challenging MIP performance hurdles requires our named executives to achieve significant annualized NGOI and Free Cash Flow to receive a payout.payout, other than payouts negotiated under new hire employment agreements as part of our recruitment process. Absolute Limit on MIP Payouts and Committee Discretion. The annual bonus otherwise payable under the MIP is also subject to an absolute limit based on the Company’s performance. For 2017,2018, the maximum annual bonus payout opportunity iswas 1.5% of NGOI for our CEO, and 0.75% of NGOI for our other named executives. The Committee retains the discretion to decrease, but not increase, the final Annual Incentive Plan payout earned. | | MIP – Management By Objectives (MBOs) |
In addition to the Core Financial Objectives, we establish multiple individual objectives, called MBOs, for each of our named executives. These individual objectives are assigned to our named executives based on their areas of influence, and on objectivesstrategic initiatives that are critical for the Company’s achievement of its overall financial goals and stretch internal objectives.goals. Based on the extent to which a named executive satisfies his or her MBOs, the Committee determines an “individual performance modifier” that increases or decreases the preliminary MIP bonus determined by the Core Financial Objectives. The individual performance modifier can range from 0% for poor performance to 150% for exceptional performance. The Committee established multiple MBOs for our CEO and Executive Chairman, and in conjunction with the CEO, for each other named executive. The MBOs selected directly complement our 20172018 corporate strategic goals to: | · | | Continue to shift focus towards Software/Cloud solutions and services as our primary source of annual revenue and margin; |
| · | | Deliver revenue growth, margin expansion and our software plan; |
| · | | Introduce product and solution innovation that continues to delight our customers; |
| · | | Build enterprise platforms that enable development of disruptive and industry-aligned omni-channel solutions and offerings for our customers; |
| · | | Forecast accuracy and operational excellence; and |
| · | | Drive talent, culture and employee engagement. |
| Customer Success Bonus for 20172018 |
Because of the critical importance of customer retention, customer referrals and customer relationships, we continuecontinued to maintain our Customer Success Bonus as a separate component of our Annual Incentive Plan, with its own separate reward structure.structure for each of our named executives except as noted above. We link our Customer Success objective to a semi-annual survey of customers conducted by an independent third party. The actual payout for this component is determined at the discretion of the Committee for our CEO, and at the discretion of the CEO for our other named executives.Committee. | Annual Incentive Plan – Total Bonus OpportunityTargets for 20172018 |
For 20172018, the Committee established MIP annual incentive targets for our named executives based on peer group data and positioning within the senior leadership team. The 20172018 target MIP and Customer Success annual incentive opportunities for our named executives were: | | | | | | | | | | | | | | | | | | | | | 2017 Annual Incentive Plan – Targets and Total Bonus Opportunity (% of Base Salary) | Named Executive | | MIP Target | | Customer Success Target | | Total Annual Bonus Target (MIP Target + Customer Success Target) | | Total Annual Bonus Opportunity(1) | William Nuti | | | | 140 | % | | | | 10 | % | | | | 150 | % | | | | 0% to 430% | | Robert Fishman | | | | 100 | % | | | | 10 | % | | | | 110 | % | | | | 0% to 310% | | Mark Benjamin | | | | 115 | % | | | | 10 | % | | | | 125 | % | | | | 0% to 355% | | Paul Langenbahn | | | | 100 | % | | | | 10 | % | | | | 110 | % | | | | 0% to 310% | | Robert Ciminera | | | | 100 | % | | | | 10 | % | | | | 110 | % | | | | 0% to 310% | | Michael Bayer | | | | 100 | % | | | | 10 | % | | | | 110 | % | | | | 0% to 310% | |
| | | | | | | | | | | | | | | | 2018 Annual Incentive Plan Targets (% of Base Salary) | Named Executive | | MIP Target | | Customer Success Target | | Total Annual Bonus Target (MIP Target + Customer Success Target) | Michael Hayford | | | | 150% | | | | | N/A | | | | | 150% | | Frank Martire | | | | 150% | | | | | N/A | | | | | 150% | | Owen Sullivan | | | | 140% | | | | | 10% | | | | | 150% | | Andre Fernandez | | | | 115% | | | | | 10% | | | | | 125% | | Daniel Campbell | | | | 100% | | | | | 10% | | | | | 110% | | William Nuti(1) | | | | 140% | | | | | 10% | | | | | 150% | | Robert Fishman | | | | 100% | | | | | 10% | | | | | 110% | |
(1) Total Annual Bonus Opportunity includes any Software & Cloud Cash Bonus Uplift Program opportunity shown in theSoftware & Cloud Cash Bonus Uplift Program – Stretch Objectives Table below.In light of his retirement during 2018, Messr. Nuti became ineligible for his 2018 annual incentive bonus opportunity. By way of illustration, in the case of our CEO, if the Core Financial Objectives were achieved atFor all named executives, the maximum level, this could generate a preliminary MIP bonus funding of 280% (200% of his 140% target bonus). Further, if he were to achieve the maximum individual performance modifier of 150%, his bonus payout could increase to 420% (150% of his preliminary MIP bonus funding of 280%). If the Customer Success objective (10%) were also met, his total Annual Incentive Plan bonus payout could be as high as 430% of his base salary, or if the goals are not achieved,potential payout is at 0%.
limited to two times their target annual incentive, except that Mr. Nuti, Mr. Fishman and Mr. Campbell’s maximum potential payouts under the MIP were limited to three times their target annual incentives plus a 10% customer success target opportunity. Mr. Nuti became ineligible for his 2018 annual incentive opportunity due to his 2018 retirement. | Annual Incentive Plan – Objectives, Results and Payouts for 20172018 |
| | MIP Core Financial Objective and Customer Success Results and Payout Funding |
The Committee established the 2017 Core Financial Objectives to align with our corporate goals as shown in the Chart below. The Chart below shows the NGOI Core Financial Objective on a constant currency basis as determined appropriate by the Committee when the 2017 MIP was established. Also shown are the MIP performance results, annual incentive payouts earned, and funding approved for our named executives for the 2017 performance year.
NGOI for 20172018 was $853$688 million which did not exceed the NGOI Performance Threshold of $920$855 million on a constant currency basis. Because NGOI Threshold performance was not met, the Free Cash Flow Goal did not apply as a modifier for 2017.2018. These performance results against our internal annual incentive plan financial metrics resulted in an earned payout of 0% of Target. The 20172018 Annual Incentive Plan objectives, results, earned payout and funded payout are shown in this Chart: | 2017 Annual Incentive Plan – Performance Objectives, Results and Funding | | 2018 Annual Incentive Plan – Performance Objectives, Results and Funding | | 2018 Annual Incentive Plan – Performance Objectives, Results and Funding | | | MIP Performance Objectives ($M)(1) | | | | MIP Performance Objectives ($M)(1) | | | MIP Discretionary Objectives | | Threshold (40% Funded) | | Target (100% Funded) | | Maximum (200% Funded) | | MIP Performance Results ($M) | | MIP Payout Funding | | Threshold (40% Funded) | | Target (100% Funded) | | Maximum (200% Funded) | | MIP Performance Results ($M) | | MIP Payout Funding | Non-GAAP Operating Income | | $920 | | $960 | | td,040 | | $853 | | 0% | | $855 | | $915 | | $995 | | $688 | | 0% | Free Cash Flow(2) | | — | | $550 | | — | | $453 | | | — | | $480 | | — | | td23 | Customer Success Objective | | Payout Linked to Overall Satisfaction
of Our Customers | | Below Expectations | | 0% | | Payout Linked to Overall Satisfaction of Our Customers | | Below Expectations |
(1) The NGOI Objectives are shown on a constant currency basis as determined appropriate by the Committee. (2) Because the NGOI Target objective was not satisfied, Free Cash Flow did not apply as a modifier. | | Individual Performance Modifier Assessment |
Although Mr. Nuti and otherthe named executives did achieve and exceed many of their 20172018 individual objectives, collectively the Company’s financial performance did not meet expectations, and 20172018 results fell short of the MIP’s threshold performance objectives. Therefore, it was determined that, in keeping with ourpay-for-performance philosophy, no MIP awards would be paid to the CEO or any other named executives for 2017 in keeping with2018, other than 2018 annual bonus payout commitments negotiated under new hire agreements as part of ourpay-for-performance philosophy. recruitment process. While individual objectives were established for Mr. Bayer,Nuti, he was not eligible to receive any 20172018 MIP award due tobecause of his September 29, 2017 separation from service with the Company.retirement during 2018. | | Annual Incentive Plan – Final 20172018 Payouts for MIP and Customer Success |
The total annual bonus payments approved for each named executive for the 20172018 performance year were: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 Annual Incentive Plan – Final Payout Calculation | Named Executive | | MIP Target (1) | | Funded MIP Payout (% of Target) | | Funded MIP Payout (Before IPM) | | Individual Performance Modifier | | MIP Payout (After IPM) | | Customer Success Payout (10% of Target) | | Total Bonus Payout | William Nuti | | | $ | 1,400,000 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | Robert Fishman | | | $ | 625,000 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | Mark Benjamin | | | $ | 862,500 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | Paul Langenbahn | | | $ | 595,193 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | Robert Ciminera | | | $ | 497,308 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | Michael Bayer | | | $ | 452,404 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | | | | | 0 | % | | | $ | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Named Executive | | MIP Target (1) | | | Funded MIP Payout (% of Target) | | | Individual Performance Modifier | | | MIP Payout (After IPM) | | | Customer Success Payout (10% of Target) | | | Total Bonus Payout | | Michael Hayford | | $ | 1,010,959 | | | | 100 | % | | | 0 | % | | $ | 1,010,959 | | | | N/A | | | $ | 1,010,959 | (2) | Frank Martire | | $ | 662,671 | | | | 100 | % | | | 0 | % | | $ | 662,671 | | | | N/A | | | $ | 662,671 | (2) | Owen Sullivan | | $ | 450,493 | | | | 100 | % | | | 0 | % | | $ | 450,493 | | | | 10 | % | | $ | 482,671 | (2) | Andre Fernandez | | $ | 246,147 | | | | 100 | % | | | 0 | % | | $ | 246,147 | | | | 10 | % | | $ | 267,551 | (2) | Daniel Campbell | | $ | 575,000 | | | | 0 | % | | | 0 | % | | $ | 0 | | | | 0 | % | | $ | 0 | (3) | William Nuti | | $ | 506,155 | | | | 0 | % | | | 0 | % | | $ | 0 | | | | 0 | % | | $ | 0 | | Robert Fishman | | $ | 625,000 | | | | 0 | % | | | 0 | % | | $ | 0 | | | | 0 | % | | $ | 0 | |
(1) Based on actual salary paid during the year. (2) As noted above, prorated target bonus amount (based on period of 2018 service) payable pursuant to negotiated new hire employment agreement. | Software & Cloud Cash Bonus Uplift Program – Stretch Objectives
|
In 2017 the Committee established a special Software and Cloud Cash “Bonus Uplift” Program as part of the Management Incentive Plan in which stretch objectives were set for certain named executives and other key leaders. The stretch objectives provided the opportunity to earn an additional 50% on top of the 2017 annual incentive plan bonus funding, subject(3) Per his new hire employment agreement, Mr. Campbell was entitled to a cap$150,000sign-on bonus during 2018.
Mr. Campbell received a discretionary bonus for 2018 that was recommended by the CEO and approved by the Committee. Mr. Campbell was awarded $350,000 for his leadership on certain company-wide strategic directives and the achievement of the total 2017 annual bonus opportunity shown in the2017 Annual Incentive Plan – Targets and Total Bonus Opportunity Table above. This additional funding was payable only if our 2017 stretch goals were achieved on both Software-Related Margin Dollars and Cloud revenue strategic objectives determined on a “make or miss” basis, where the payout could be either 0% or 50%. The stretch objectives were not achieved in 2017, and no payout was earned. The 2017 Software & Cloud Cash Bonus Uplift Program stretch objective metrics and target and actual payouts are shown in this Chart:
| | | | | | | Named Executive | | Stretch Objective Metric | | Target Bonus Payout | | Actual Cash Bonus Uplift
Payout for 2017(1) | Mark Benjamin
| | Software-Related Margin Dollars /
Cloud Revenue
| | 50% of annual incentive bonus funding | | $0 | Paul Langenbahn
| | | | Michael Bayer
| | | |
(1) The stretch objectives were not achieved in 2017 and no payment was earned.various individual management objectives.
| 20172018 Long-Term Incentives
|
Our Long-Term Incentive Program directlygenerally aligns a largesignificant portion of the total compensation opportunity of our named executives directly with Company performance and changes in stockholder value. | 2017 LTI Equity Award Mix
|
The use of equity for our LTI Program links our executives and stockholders to a common goal: sustainable stockholder value creation. In February 2017,2018, the Committee approved the 20172018 annual equity awards under our Stock Plan. EffectivePlan in the form of our 1/3 performance-based restricted stock units, 1/3 performance-vesting restricted stock units, and new for 2017, 100% of2018, 1/3 nonqualified stock options to further increase management alignment with stockholder long-term interests. In addition to these annual grants to executives employed on the February 2018 award date, certain named executives hired during 2018 receivedad-hoc LTI awards for our named executives are subject to performance conditions. Theat the time of hire under their negotiated new hire agreements. Generally, the majority of these new hire awards were made in the form of stock options. As noted above, while stock options vest with continued service, the awards will only deliver value if our traditionalshare price increases. The Committee determined that this approach to new hire awards appropriately balanced ourpay-for-performance philosophy with the exigencies of recruiting new executives who were not employed by the Company when our 2018 business plan was approved. For 2019, the majority of named executive long-term incentive awards were granted with performance-based restricted stock units (75%), and new for 2017, performance-vesting restricted stock units (25%), in which a performance condition must be achieved for vesting to occur (replacing the time-based restricted stock units granted to our named executives in previous years).conditions. We generally use equity awards in our LTI Program to create commonality of interests with stockholders and to help attract and manage our ability to retain our key executives. These awards also provide a good balance for our executives and protection for our stockholders, because wealth creation can be realized by an executive only when bothupon achievement of performance goals, and service-based milestones are achieved in addition toand/or the Company’s long-term Company stock price performance. | | Traditional Performance-Based and Performance-Vesting2018 Annual LTI Equity Awards – Key Features
|
The 2017key features of the various types of 2018 LTI equity award mix for our named executives consisted of 75% performance-based RSUs and 25% performance-vesting RSUs.awards are: | · | | Performance-Based RSUs awarded in 2017 have a three-year performance period (2017-2019) with secondary(2018-2020). No units are earned unless we achieve a three-year average return on capital (ROC) performance metrics consistingthreshold for the performance period. Assuming that the ROC threshold is achieved, from 0% to 200% of the target units may be earned based on the Company’s achievement of annualNon-GAAP Diluted Earnings Per Share (NGDEPS) with a 60% weighting,(60% weighting) and Software-Related Margin Dollars (SRMD) with a 40% weighting as described below. However, no units are earned unless we also achieve a three-year average ROC (the primary(40% weighting) performance metric) performance threshold for the 2017-2019 period as described below.metrics. Further, if the NGDEPS and SRMD performance goals are not achieved in the first year of the performance period, then the entire award is forfeited and there is no opportunity to earn any portion of the award based on future year performance. Any unitsforfeited. Units earned from achievement ofachieving these performance goals vest 42 months after the grant date (i.e., on August 27, 2020)23, 2021), so long as the executive |
| | continues Company service through the vesting date. The maximum share payout for these performance-based units is 150%200% of target. |
| · | | Performance-Vesting RSUs awarded in 2017 vest 1/3 on each anniversary of the grant date, provided that NCR achieves a predetermined level of SRMD for the period of January 1, 20172018 through December 31, 2017, |
| | 2018, and the executive continues Company service through the applicable vesting dates. The maximum share payout for these performance-vesting units is 100% of target. |
| · | | Stock Options are awarded as nonqualified options with an exercise price equal to the closing price of NCR’s common shares on the grant date. They have a four-year restriction period and vest1⁄4 on each anniversary of the grant date, so long as the executive continues Company service through the applicable vesting dates. |
| · | | Time-Based RSUs have a three-year restriction period and vest 1/3 on each anniversary of the grant date, so long as the executive continues Company service through the applicable vesting dates. |
| · | | Special Vesting Rules provide that early vesting can occur only if employment ends because of death, disability or other limited reasons described in thePotential Payments Upon Termination or Change in Control section starting on page 77.below. |
ForUnder our 2017 equity awards,Stock Plan, the number of shares subject to restricted stock units wasRSUs for an award is determined by converting the dollarCommittee approved award value approved by the Committee into a specific number ofto shares based on the grant date closing price of our common stock. The number of stock as provided under our Stock Plan.options for an award is determined using the Committee approved award value and the Black-Scholes valuation method.
| 2018 Performance-Based RSUs – Performance Metrics |
One-third of our annual LTI equity award to named executives employed on the February award date consisted of performance-based RSUs. The performance metrics for these awards were: | | Return On Capital (ROC) – Primary Performance Metric |
| · | | ROC Performance Threshold: No performance-based RSUs are earned unless the Company achieves a three-year average ROC performance threshold of 20% over the 2017-20192018-2020 performance period. At the time the awards were granted, the Committee decided that ROC performance results would be determined on a constant currency basis to eliminate the impact of foreign currency fluctuations during the performance period, based on the same foreign exchange rates used to establish the Company’s 20172018 financial plan. |
| · | | ROC Defined: We calculate ROC by dividing NGOI by Controllable Capital, which represents the working capital that our management team has deployed at any given time. |
| · | | Why We Use ROC: This ROC threshold is a significant hurdle that ensures restricted stock units can be earned only if the Company generates enough ROC during the performance period. Using this ROC performance threshold protects the interests of our stockholders. |
| | Non-GAAP Diluted EPS – Secondary Performance Metric (60% Weighting) |
| · | | NGDEPS Performance Threshold – 60% Weighting: If the ROC performance threshold is met, the number of shares earned for each performance-based unit depends on our NGDEPS results over each year in the three-year performance period. The Committee established a NGDEPS performance target of $3.35$3.38 per share with a 60% weighting for 20172018 awards. |
| · | | NGDEPS Defined: We calculate NGDEPS by excluding pensionmark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition related intangibles, from GAAP diluted earnings per share. |
| · | | Why We Use This Metric: NGDEPS is a good external measure of the Company’s annual performance that investors can compare against our quarterly/annual guidance. This is also a common financial metric that investors use to evaluate company performance against peer groups and other performance benchmarks. |
| | Software-Related Margin Dollars – Secondary Performance Metric (40% Weighting) |
| · | | SRMD Performance Threshold – 40% Weighting: If the ROC performance threshold is met, the number of shares earned for each performance-based unit depends on our SRMD results over each year in the three-year performance period. The Committee established a SRMD performance target of $1,100.0$1,055.0 million for 20172018 awards, with a 40% weighting. |
| · | | SRMD Defined: We determine SRMD by excluding certain infrastructure costs from the gross margin of our Software segment. |
| · | | Why We Use This Metric: SRMD is a good internal measure of the Company’s annual performance against one of our core strategic financial goals, the growth for which is essential to achieving our Vision 2020 strategy. |
| | 2017 LTI Equity Award Performance Metric2018 Performance-Based RSU Results
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2017 NGDEPS Achieved: $3.20 per share.
| · | | 2018 NGDEPS Achieved: $2.62 per share. |
| · | | 2018 SRMD Achieved: $960 million. |
2017 SRMD Achieved: $1,009 million.
| | Impact of Performance Results on 2018 Performance-Based RSU Awards |
| · | | The 2018 NGDEPS of $2.62 per share and the SRMD of $960 million resulted in an earned payout of 0% for 2018 with respect to both components of the performance-based RSUs granted on February 23, 2018. As a result, these awards were forfeited, and no payout can be earned under these awards regardless of future performance. |
| Impact of Performance Metric Results on 2017 Performance-Based LTI Equity Awards
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Impact on 2017 Performance-Based Equity Awards: The 2017 NGDEPS of $3.20 per share and the SRMD of $1,009 million resulted in an earned payout of 0% for 2017 with respect to both components of the awards granted on February 27, 2017. As a result, these awards were forfeited and no payout can be made under these awards.
| History of Annual LTI Equity Awards |
This Chart shows our three-year payout history for annual performance-based equity awards:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual LTI Equity Awards: Historical Goals, Results and Payouts | | Award Year | | Performance Period | | Performance Metric / Weighting | | Performance Range ($M) | | | Return on Capital Results | | | Performance Metric Results ($M) | | | Final Calculated Payout | | | | | Threshold | | | Target | | | Max | | | | | 2017 | | 2017 – 2019 | | NGDEPS – 60% | | $ | 3.25 | | | $ | 3.35 | | | $ | 3.55 | | | | 65.4%(1) | | | $ | 3.20 | | | | 0.0% | | | | SRMD – 40% | | $ | 1,080 | | | $ | 1,100 | | | $ | 1,150 | | | | $ | 1,009 | | | 2016 | | 2016 – 2017 | | NGDEPS – 60% | | $ | 2.72 | | | $ | 2.85 | | | $ | 3.00 | | | | 66.3%(2) | | | $ | 3.02 | | | | 148.2% | | | | SRMD – 40% | | $ | 855 | | | $ | 950 | | | $ | 1,000 | | | | $ | 996 | | | 2015 | | 2015 – 2016 | | NPOICC(3) – 100% | | $ | 631 | | | $ | 709 | | | $ | 750 | | | | 70.1% | | | $ | 721 | | | | 114.5% | |
(1) Our ROC for the 2017 performance year was 65.4% (NGOI of $853 million ÷ Controllable Capital of $1,305 million). However, because we did not meet our 2017 performance conditions, 100% of this award was forfeited.
(2) Our ROC for the 2016 Award Year, which is measured over thetwo-year performance period of 2016 – 2017, was 66.3% (average of 2016 ROC of 67.1% and 2017 ROC of 65.4%).
(3) In 2015, our discretionary Performance Metric wasNon-Pension Operating Income Minus Capital Charge (NPOICC).
| 2018 Performance-Vesting RSUs – Performance Metric |
New for 2017, 25%One-third of ourthe annual 2018 LTI equity award to our named executives employed on the February award date consisted of performance-vesting RSUs, which replaced our traditional time-based RSUs that were awarded in prior years.RSUs. No performance-vesting RSUs are earned unless the 20172018 SRMD (as defined above) is achieved. The 20172018 SRMD of $1,009$960 million exceeded the SRMD performance condition of $800$950 million established for the 20172018 performance-vesting RSUs, and 1/3 of these awards will vest on each anniversary of the February 27, 201723, 2018 grant date, subject to the executive’s continued service with the Company through the applicable vesting dates.
| 20172018 Total Annual LTI Equity Award Values
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This Chart shows the 20172018 total annual LTI equity award values granted to(1) approved by the Committee for our named executives:(1)executives, including annual awards to named executives employed on the February annual award date, and new hire and otherad-hoc awards (see theAgreements With Our Named Executives Section): | | | | | | | | | | | | | Named Executive | | Traditional Performance- Based RSUs | | | (New for 2017) Performance-Vesting RSUs | | | Total 2017 LTI Award Value | | William Nuti | | $ | 7,499,993 | | | $ | 2,499,998 | | | $ | 9,999,991 | | Robert Fishman | | $ | 1,125,011 | | | $ | 374,987 | | | $ | 1,499,998 | | Mark Benjamin | | $ | 2,625,010 | | | $ | 874,987 | | | $ | 3,499,997 | | Paul Langenbahn | | $ | 1,874,986 | | | $ | 625,012 | | | $ | 2,499,998 | | Robert Ciminera | | $ | 1,499,999 | | | $ | 500,000 | | | $ | 1,999,999 | | Michael Bayer | | $ | 899,999 | | | $ | 300,000 | | | $ | 1,199,999 | |
| | | | | | | | | | | | | | | | | | | | | Named Executive | | Stock Options | | | Performance- Based RSUs | | | Performance- Vesting RSUs | | | Time- Based RSUs | | | Total 2018 LTI Award Value | | Michael Hayford | | $ | 7,499,881 | | | | — | | | | — | | | $ | 5,000,011 | | | $ | 12,499,892 | | Frank Martire | | $ | 3,750,354 | | | | — | | | | — | | | $ | 2,249,988 | | | $ | 6,000,342 | | Owen Sullivan | | $ | 3,749,994 | | | | — | | | | — | | | $ | 2,250,000 | | | $ | 5,999,994 | | Andre Fernandez | | $ | 999,998 | | | | — | | | | — | | | $ | 3,000,011 | | | $ | 4,000,009 | | Daniel Campbell | | $ | 499,996 | | | $ | 500,015 | | | $ | 4,499,996 | | | | — | | | $ | 5,500,007 | | William Nuti(2) | | $ | 2,500,000 | | | $ | 2,500,008 | | | $ | 2,500,008 | | | | — | | | $ | 7,500,016 | | Robert Fishman | | $ | 666,665 | | | $ | 666,675 | | | $ | 666,643 | | | | — | | | $ | 1,999,983 | |
(1) Represents the grant date fair value of RSUs and stock options, as shown in theGrants of Plan-Based Awards – 2017 Table 2018 on page 72.Table. The above amounts reflect the 2017 annual(2) Mr. Nuti’s 2018 LTI equity award values approved bywas forfeited upon his separation of service from the Committee for each named executive taking into account the partially front-loaded nature of the Vision 2020 LTI Awards granted in February of 2016. These Vision 2020 LTI Awards are described further in theUpdate on 2015 and 2016 LTI Equity Awards section below.Company.
| Update on 2015 and 2016the 2017 LTI Equity Awards |
In 2015, we made anOn February 27, 2017, the Committee granted annual grantLTI awards to named executives employed on that date consisting of performance-based RSUs to our named executives, other than Mr. Benjamin who joined the Company in October of 2016. These awardsand performance-vesting RSUs. The 2017 performance-based RSUs had atwo-year three-year performance period that began on January 1, 20152017 and ended on December 31, 2016.2019. In 2018, the
Committee certified that required minimum 2017 NGDEPS and SRMD performance for these awards was not achieved, and these awards were forfeited. The number of shares earned, based on performance achieved, could range from a threshold of 25%2017 performance-vesting RSUs were subject to a maximum of 150% of units granted.2017 SRMD goal. In February 2016,2018, the Committee certified that performance for these awards was achieved, at 114.5% of target. These awards vest 100% on October 23, 2018, subject to the executive’s continued service with the Company through the vesting date. Earlier vesting can occur because of death, disability or for other limited reasons described in thePotential Payments Upon Termination or Change in Control section starting on page 77. In a special grant made in February 2016, all named executives, other than Mr. Benjamin who joined the Company in October of 2016, were awarded price-contingent RSUs in the form of Vision 2020 LTI Awards with the following terms:
50% would be earned if NCR’s stock price closed at or above $35 per share for any twenty consecutive trading days at any time during the five-year period after the grant date.
50% would be earned if NCR’s stock price closed at or above $40 per share for any twenty consecutive trading days at any time during the five-year period after the grant date.
Vesting is also conditioned on continued service with the Company, where no more
| | than 50% of the award earned will vest on the three-year anniversary of the grant date, and up to 100% of the award earned could vest on the four-year anniversary of the grant date, and finally, if not previously vested, up to 100% of the award earned can vest on the five-year anniversary of the grant date conditioned entirely on NCR achieving the $35 and $40 stock price hurdles prior to these potential vesting dates.
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On December 8, 2016, the Committee certified that the $35 per share price hurdle for our Vision 2020 LTI Awards had been satisfied, based on NCR’s stock price closing above $35 per share for twenty consecutive trading days (November 8, 2016 through December 6, 2016). On January 24, 2017, the Committee certified that the $40 per share price hurdle for our Vision 2020 LTI Awards had been satisfied, based on NCR’s stock price closing above $40 per share for twenty consecutive trading days (December 7, 2016 through January 5, 2017). While these awards are earned, they are not currently vested and are subject to continued employment with the Company where 50%1/3 of these awards will vestvesting on the three-yeareach anniversary of the grant date andso long as the remaining 50% of the awards will vest on the four-year anniversary of the grant date.
In 2016, the Committee approved an Ad Hoc LTI award for Mr. Benjamin with a grant date value of $8.5 million which was granted at the time of his hire. Mr. Benjamin’s new hire award was in the form of single-metric performance-based RSUs with Committee-approved SRMD goals, in compliance with our policy that retention awards to executive officers will include performance-based vesting conditions. The award was to be earned based on the Company’s achievement of such SRMD goals during the performance periods from January 1, 2017 through June 30, 2017, and January 1, 2017 through December 31, 2017. In 2017 and early
2018, the Committee certified that the performance goals for this award were achieved, and therefore 25% of this award vested on November 1, 2017, with 35% of the award to vest on November 1, 2018, and 40% of the award to vest on November 1, 2019, subject to Mr. Benjamin’s continuedcontinues Company service with the Company through the applicable vesting dates.
| | Economic Profit Plan Awards Before 2017 |
In 2017, no new awards were made to any participants underOn February 27, 2019, the Committee terminated the NCR Corporation Economic Profit Plan which is(EPP), a long-term incentive plan that allowsallowed participants to share in a portion of the “Economic Profit” that they helped to create. However,No new EPP awards have been granted since 2016; however, 33% of remaining previously earned EPP amounts are payable pro rata from participant “Bonus Bank” balances in August of the following two years,(which held previously earned EPP awards) were subject to annual payout so long as the Company passespassed a cash flow test. In connection with the termination of the EPP, cash flow testparticipants who were actively employed on the EPP elimination date, including Mr. Fishman, will receive any remaining portion of their Bonus Bank balances in a single lump sum distribution after February 28, 2020. Until the date these remaining balances are distributed, the EPP will make distributions in the payout year.normal course (for example, the regular distributions scheduled to be made in August 2019 will be paid at that time, subject to EPP terms). Mr. Nuti and Mr. Fishman are the only NEOs who participated in the EPP. Information on their Bonus Banks are accounts that hold prior yearBank balances can be found in the chart below. Notwithstanding the EPP awards. termination, Mr. Nuti’s Bonus Bank balance will be distributed in accordance with the terms of his retirement agreement as noted in the chart below.
As described below, in 2018 the Committee authorized Bonus Bank payments attributable topre-2017 previously earned EPP awards for allMr. Nuti and Mr. Fishman, the only named executives except for Mr. Benjamin who joined the Company in October 2016, and therefore did not participate in the EPP.with EPP Bonus Bank balances. Cash Flow Test. The EPP cash flow test requires that our “Cash Flow from Operations” equal or exceed 1% of total revenue. Under the EPP, Cash Flow from Operations means net cash provided by (used in) operating activities, adjusted to exclude any extraordinary cash payments made to or under the Company’s global defined benefit pension and retirement plans in connection with the Company’s strategy to reduce pension liability or increase pension funding. Cash Flow from Operations, as defined by the EPP, is anon-GAAP measure. Net cash provided by operating activities is the most directly comparable GAAP measure. Payout of Amounts Attributable to Prior Year AwardsAwards.. InOn February 2018,7, 2019, prior to the EPP termination, the Committee certified that the Company passed the 20172018 EPP cash flow test, because in 20172018 our total revenues were $6,516$6,405 million, and our Cash Flow from Operations of $755$572 million exceeded 1% of such total revenues (or $65$64 million). Accordingly, the Committee authorized pro rata Bonus Bank payments to be made in August 2018 for these2019. Of our named executives, which payments are entirely attributable toonly Mr. Nuti and Mr. Fishman participate in the EPP, awards made and earned before 2017:the table below details their EPP balances and 2018 payments. | | | | | | | | | | | | | | | | | EPP – Payout of Amounts Earned in Prior Years | | Named Executive | | 2017 Bonus Credit Award(1) | | | Bank Balance (Earned Before 2017 under Prior Year Awards)(2) | | | 2017 Cash Payout from Bank Balance(3) | | | 2017 Ending Bank Balance (After 2017 Payout) | | William Nuti | | $ | 0 | | | $ | 3,518,132 | | | $ | 1,160,984 | | | $ | 2,357,148 | | Mark Benjamin(4) | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | Robert Fishman | | $ | 0 | | | $ | 975,641 | | | $ | 321,962 | | | $ | 653,679 | | Paul Langenbahn | | $ | 0 | | | $ | 327,087 | | | $ | 107,939 | | | $ | 219,148 | | Robert Ciminera | | $ | 0 | | | $ | 299,829 | | | $ | 98,944 | | | $ | 200,885 | | Michael Bayer | | $ | 0 | | | $ | 885,859 | | | $ | 296,763 | | | $ | 296,763 | |
| | | | | | | | | | | | | EPP – Payout of Amounts Earned in Prior Years | | Named Executive | | Bank Balance Before 2018 Payments | | | 2018 Cash Payments | | | Remaining Bank Balance | | William Nuti(1) | | $ | 3,518,132 | | | $ | 2,359,583 | | | $ | 1,158,549 | | Robert Fishman | | $ | 975,641 | | | $ | 321,962 | | | $ | 653,679 | |
(1) As noted above, no new EPP Bonus Credit Awards were madeMr. Nuti retired as of April 30, 2018 due to any participants for the 2017 performance year. (2) 33% of the Bank Balance (before 2017 payout) is the 2017 EPP Cash Payout.
(3) The EPP provides that the 2017 Cash Payout generally will be made in August 2018, subject to the Company’s satisfaction ofdisability. In accordance with the EPP Cash Flow test described above. Special EPP payout terms provideregarding disability, Mr. Nuti’s retirement agreement provides that due to Mr. Bayer’s separation from service on September 29, 2017, he will receive 67% of his totalfull Bank Balance shown above (that is, $593,526) in four equal installments on March 1 and September 1 of 2018 and 2019, subject to the Company’s satisfaction ofunder the EPP Cash Flow test for the applicable year.
(4) Mr. Benjamin joined the Company in October 2016, and therefore did not participateof $3,518,132, in the EPP.following installments: 11/1/2018 – $2,359,583, 4/30/2019 – $386,183, 10/30/2019 – $386,183, 4/30/2020 – $386,183.
| 20182019 LTI Program – Traditional Performance-Based RSU Awards, Performance-Vesting RSUs and Stock Options
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For 2018,2019, we continuehave simplified our annual LTI program for our named executives to include traditionala mix of 65% performance-based RSUs and performance-vesting RSUs, and new for 2018, we introduced35% stock options into our annual LTI equity award mix for our executive officersoptions. These awards continue to further ensure alignment with our stockholders’ long-term interests. This continuesinterests and also continue our approach requiring all annual LTI equity awards granted to our executive officers to include performance conditions for vesting, or be tied to our stock price performance for stock options to create stockholder value. The 2018 traditional2019 performance-based RSUs continuerequire achievement of challenging performance metrics that consist of NCR Revenue* (40% weighting) and Adjusted Operating Income** (60% weighting). These performance metrics will be measured over aone-year performance period, and will vest 1/3 on each anniversary of the grant date subject to have an extended three-year performance period.the recipient’s continued service through the applicable vesting dates. In addition, to align more closely with our peer group LTI practices, these awards have been granted with a payout threshold of 40% of target and a payout maximum of 200%50% of target (up from 25% and 150%, respectively,40% compared to the 20172018 performance-based RSU awards). The awards remain subject to a maximum payout of 200% of target. Stock options that vest 1/4 on each anniversary of the grant date were also awarded, and these provide value to the executives only to the extent that our share price appreciates. These 20182019 changes to our annual LTI equity award mix reflect the Committee’s new requirements that 100% ofdecision to simplify our LTI program and more directly link earned incentives to the long-term equity award value granted to our named executives be “at risk,” which is significantly more aggressive than our peer group LTI practices, and be linked to achievement of performance goals that reward our named executives for creating sustainable value creation in alignment with our stockholders’ long-term interests. The 2018 LTI program is described as follows: decision to shift to aTraditional Performance-Based RSUsone-year awarded in 2018 have a three-year performance period (2018-2020) with | | secondary performance metrics consisting of NGDEPS with a 60% weighting, and SRMD with a 40% weighting. However, no
|
| | units are earned unless we also achieve a three-year average ROC (the primary performance metric) performance threshold for the 2018-2020 period. Any units earned from achievement of these performance goals will vest 42 months after the grant date (August 20, 2021) if the number of shares earned is less than or equal to 100%; if the number of shares earned is greater than 100%, then the units earned will vest 50% in 30 months and 50% in 42 months, so long as the named executive continues Company service through the applicable vesting dates. The maximum share payout for these performance-based units is 200% of target.
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| · | | Performance-Vesting RSUs awarded in 2018 will vest 1/3 on each anniversary of the grant date, provided NCR achieves a predetermined level of SRMD for the
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| | performance period of January 1, 2018 through December 31, 2018, and the named executive continues Company service through the applicable vesting dates.
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Stock Options awardedfor 2019 was made in 2018 will vest 1/4 on each anniversarylight of the grant date so long asCompany’s current transformation, and related to this, the named executive continues Company service throughdifficulty in setting accurate multi-year performance goals at this time. The Committee also took into consideration the forfeiture of the 2017 and 2018 performance-based RSUs due to applicable vesting dates. The options have an exercise price equalgoals not being satisfied. As in the past, the Committee expects to review the fair market valueperformance period annually for future equity awards.
* Revenue metric to be adjusted to eliminate the impact of our common stock on the grant date and are exercisable for a period of seven years from the grant date. | • | | Special Vesting Rules provide that early vesting can occur only if employment ends because of death, disability or other limited reasons described in thePotential Payments Upon Termination or Change in Control section starting on page 77.
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For our 2018 LTI equity awards, the number of shares subject to RSUsforeign currency and the numberimpact of stock options were determined by convertingmergers and acquisitions.
** Adjusted Operating Income metric is our income (loss) from operations as reported under generally accepted accounting principles in the dollar value approved byUnited States, excluding certain items, as well as adjusted to eliminate the Committee into a specific numberimpact of sharesforeign currency and options in accordance with the termsimpact of our Stock Plan.mergers and acquisitions. This Chart below shows the 20182019 total annual LTI equity award values granted to our named executives other than Mr. Bayer,Nuti who separated from service with Company in September of 2017:retired during 2018, and Mr. Fishman, who did not receive any 2019 award due to his announced retirement: | | | | | | | | | | | | | | | | | 2018 Total Annual LTI Equity Award Values | | Named Executives | | Performance- Vesting RSU Award (1/3 of value) | | | Performance- Based RSU Award (1/3 of value) | | | Stock Option Award (1/3 of value) | | | Total Annual LTI Equity Award Value(1) | | William Nuti | | $ | 2,500,000 | | | $ | 2,500,000 | | | $ | 2,500,000 | | | $ | 7,500,000 | | Robert Fishman | | $ | 666,667 | | | $ | 666,667 | | | $ | 666,666 | | | $ | 2,000,000 | | Mark Benjamin | | $ | 1,500,000 | | | $ | 1,500,000 | | | $ | 1,500,000 | | | $ | 4,500,000 | | Paul Langenbahn | | $ | 1,000,000 | | | $ | 1,000,000 | | | $ | 1,000,000 | | | $ | 3,000,000 | | Robert Ciminera | | $ | 916,667 | | | $ | 916,667 | | | $ | 916,666 | | | $ | 2,750,000 | |
| | | | | | | | | | | | | 2019 Total Annual LTI Equity Award Values | | Named Executives | | Performance- Based RSU Award (65% of value) | | | Stock Option Award (35% of value) | | | Total Annual LTI Equity Award Value(1) | | Michael Hayford | | $ | 6,500,000 | | | $ | 3,500,000 | | | $ | 10,000,000 | | Frank Martire | | $ | 2,925,000 | | | $ | 1,575,000 | | | $ | 4,500,000 | | Owen Sullivan | | $ | 3,900,000 | | | $ | 2,100,000 | | | $ | 6,000,000 | | Andre Fernandez | | $ | 2,600,000 | | | $ | 1,400,000 | | | $ | 4,000,000 | | Daniel Campbell | | $ | 1,300,000 | | | $ | 700,000 | | | $ | 2,000,000 | |
(1) Represents the 20182019 total target long-term incentive program dollar value approved by the Committee for our named executives. Like our other full-time salaried U.S. employees, the named executives participate in a variety of 401(k) and health and welfare benefitsbenefit programs designed to attract, retain and motivate our workforce and keep us competitive with other employers. Our 401(k) plan encourages employees to save and prepare financially for retirement. Health and welfare and paidtime-off benefits help our workforce stay healthy, focused and productive. Of our named executives, only Mr. Fishman had a benefit as of December 31, 20172018 under our frozen, broad-based U.S. pension plans (the “U.S. Pension Plan”) that we closed over a decade ago. Mr. Fishman’s benefit is shown in and described in more detail with ourPension Benefits Table below. The named executives are eligible for other limited benefits that the Committee considers reasonable and appropriate under our executive compensation philosophy. These benefits, which do not represent a significant portion of our named executives’ compensation, are intended to attract and retain highly qualified talent, minimize distractions from critical Company business and ensure the safety and security of our key executives. These benefits are shown in ourPerquisites Table and reported as “All Other Compensation” in ourSummary Compensation Table. They include financial counseling, executive medical exam,exams, relocation benefits, and also with respect to our CEO occasional hotel accommodation,Mr. Hayford, Mr. Martire, and Mr. Nuti, limited personal use of corporate aircraft and security expenses.aircraft. The Committee prohibits all tax reimbursements (or taxgross-ups) with the exception of those provided in connection with relocations required by the Company, which are generally also provided tonon-executive employees, and those that may be provided in the event of a qualifying termination following a change in control of the Company to grandfathered Change in Control Severance Plan participants who entered the plan before January 28, 2010 (as discussed below).employees. | Change in Control and Post-Termination Benefits |
| | Change in Control Severance Benefits |
If the Company considers potential change in control transactions, we want to ensure that key executives are incentivized to remain with us during this process and evaluate the transactions in an objective and undistracted way in order to support stockholder value. For these reasons, we have the Amended and Restated NCR Change in Control Severance Plan (the “Change in Control Severance Plan”) for our senior executive team. Under this plan, we pay only “double-trigger” separation benefits, that is, benefits pay out only if both a change in control occurs and employment ends in a qualifying termination. Our Change in Control Severance Plan has two benefit levels that apply to our named executives. The CEO’s and theOur current President and COO’sCEO, Executive Chairman, COO, and CFO’s cash severance benefit is 300% of base salary plus target bonus. For other current named executives, the cash severance benefit is 200% of base salary plus target bonus. There are no taxgross-ups under the plan except for grandfathered participants who joined the plan before January 28, 2010. A grandfathered participant gets nogross-up unless the value of all severance and change in control payments exceeds 110% of the maximum amount that could be paid to the participant under Code Section 280G without imposing an excise tax.any currently employed named executives. If this value does not exceed the 110% threshold, we reduce payments to the extent needed to avoid the excise tax. For more about double-trigger benefits, see thePotential Payments Upon Termination or Change in Control section starting on page 77.below.
We provide our key executives reasonable severance benefits to ensure that we remain competitive with other employers, and to help us attract and retain top talent. When our CEO was hired, he was offered particular severance benefits under a negotiated employment agreement. We also have ourOur Executive Severance Plan for our other named executives, which provides certain severance benefits
in the event employment ends in a qualifying termination not connected to a change in control. For more about these severance benefits, see theAgreements with Our Named Executives section starting on page 71, and thePotential Payments Upon Termination or Change In Control section starting on page 77.below. | Robust Stock Ownership Requirements |
The Committee recognizes that executive stock ownership plays a critical role in aligning the interests of management with those of stockholders. We also believe that our most senior executives should maintain a significant personal financial stake in NCR to promote a long-term perspective in managing our business. For these reasons, we revised our formal stock ownership guidelines in 2016 to require significantly increased NCR stock ownership by our key executives. Under the new guidelines, we require that our named executives own NCR common stock worth a guideline multiple of base salary. Shares that count toward the guideline include shares owned personally, restricted stock and RSUs, and stock acquired through our Employee Stock Purchase Plan. Stock options do not count toward the guideline. Newly hired or promoted executives have five years to reach their guideline. The table below shows our increasedcurrent guidelines. This Table shows thatAs of February 15, 2019, all of ourthe Company’s currently employed named executives exceed our increasedeither met or are on track to meet the stock ownership policy requirements:guidelines. Mr. Fishman, in his role as Senior Advisor, is not subject to stock ownership guidelines.
| | | | | | | Stock Ownership Guideline as a Multiple of Base Salary as of February 23, 2018
| | Named Executive | | Increased
Guideline | | Actual | | William Nuti Michael Hayford
| | 6 | Frank Martire | | 46.0 times | 6 | Robert Fishman Owen Sullivan
| | 5 | Andre Fernandez | | 4 | | | 21.7 times | | Mark Benjamin
| | 5 | | | 14.2 times | | Paul Langenbahn Daniel Campbell
| | 3 | | | 15.5 times | | Robert Ciminera
| | 3 | | | 12.4 times | |
| Compensation Clawback Policy |
We have a policy generally providing that short-term and long-term incentive awards to our executive officers are subject to clawback (forfeiture or repayment), as directed by the Committee, if: | · | | the payment, grant or vesting of the award was based on achieving financial results that were the subject of a restatement of the Company’s financials within three years; and |
| · | | the Committee determines in its sole discretion that the executive officer’s negligence, fraud or misconduct caused or contributed to the need for the restatement, and that forfeiture or |
| | repayment is in the best interests of the Company and our stockholders. |
If it is determined that the above conditions are met, then to the full extent permitted by law and as directed by the Committee, the executive officer must also forfeit any outstanding equity awards and repay amounts received from time-based equity award vesting and gains from stock option exercises. | Hedging and Pledging Policy |
We have a policy that prohibits our employees from trading in derivative securities related to Company stock or debt, including publicly traded options, short sales, puts, calls, strips or similar derivative securities. This policy also generally prohibits pledging NCR securities as collateral for a loan. | Tax Considerations in Setting Compensation |
Under Federal tax rules as in effect for tax years beginning prior to January 1, 2018, compensation over $1 million annually for certain named executives could not be deducted unless paid under a performance-based plan satisfying applicable Code section 162(m) requirements (or otherwise meeting certain IRS requirements). While we generally paid compensation intended to be deductible to the extent permitted by applicable tax laws, the Committee has not adopted a policy requiring all pay to be deductible, so as to preserve the ability to awardnon-deductible compensation if determined to be in the best interests of our stockholders. Beginning in 2018, this performance-based compensation exception to the $1 million annual limit on deductions for covered employee compensation, including compensation payable to our named executives, has generally been eliminated (except with regard to certain grandfathered arrangements). The Company expectsunderstands that compensation payable to our named executives for 2018 and future years generally will not be fully deductible. As has historically been the case, the Committee continues to have the ability to pay compensation to our named executives in appropriate circumstances, even if such compensation is not fully deductible. | Board and Compensation and Human Resource Committee Report on Executive Compensation |
The Compensation and Human Resource Committee, comprised of independent directors, reviewed and discussed the above Compensation Discussion & Analysis with management. Based on that review and those discussions, the Committee recommended to our Board of Directors that the Compensation Discussion & Analysis be included in these proxy materials. The Compensation and Human Resource Committee Linda Fayne Levinson (Chair) Chinh E. Chu Gary J. DaichendtRichard L. Clemmer
| Executive Compensation Tables |
| Summary Compensation Table |
Our Summary Compensation Table below shows the total compensation paid to or earned by each of our named executive officersexecutives with respect to the fiscal year ending December 31, 2018, and for those individuals who were then named executives, with respect to the fiscal years ending December 31, 2017 2016 and 2015.2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table ($) | | Name and Principal Position (a) | | Year (b) | | | Salary (c) | | | Bonus (d) | | | Stock Awards (e)(1) | | | Non-Equity Incentive Plan Compensation (f)(2) | | | Change in Pension Value (g)(3) | | | All Other Compensation (h)(4) | | | Total (i) | | William Nuti Chairman of the Board and Chief Executive Officer | | | 2017 | | | | 1,000,000 | | | | — | | | | 9,999,991 | | | | 1,160,984 | | | | — | | | | 274,043 | | | | 12,435,018 | | | | 2016 | | | | 1,000,000 | | | | — | | | | 14,999,995 | | | | 2,756,812 | | | | — | | | | 433,460 | | | | 19,190,267 | | | | 2015 | | | | 1,000,000 | | | | — | | | | 8,000,014 | | | | 2,586,286 | | | | — | | | | 360,391 | | | | 11,946,691 | | Robert Fishman Executive Vice President and Chief Financial Officer | | | 2017 | | | | 625,000 | | | | — | | | | 1,499,998 | | | | 321,962 | | | | 41,940 | | | | 26,645 | | | | 2,515,545 | | | | 2016 | | | | 611,539 | | | | — | | | | 4,499,995 | | | | 928,314 | | | | 21,666 | | | | 26,645 | | | | 6,088,159 | | | | 2015 | | | | 575,000 | | | | 100,000 | | | | 1,099,991 | | | | 717,224 | | | | (13,008 | ) | | | 23,593 | | | | 2,502,800 | | Mark Benjamin President and Chief Operating Officer | | | 2017 | | | | 750,000 | | | | — | | | | 3,499,997 | | | | — | | | | — | | | | 26,774 | | | | 4,276,771 | | | | 2016 | | | | 129,808 | | | | 215,625 | | | | 8,500,010 | | | | 18,750 | | | | — | | | | 32,194 | | | | 8,896,387 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul Langenbahn Executive Vice President, Global Software | | | 2017 | | | | 595,193 | | | | — | | | | 2,499,998 | | | | 107,939 | | | | — | | | | 26,490 | | | | 3,229,620 | | | | 2016 | | | | 460,193 | | | | — | | | | 3,000,002 | | | | 466,172 | | | | — | | | | 26,490 | | | | 3,952,857 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Robert Ciminera Executive Vice President, Global Customer Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 | | | | 497,308 | | | | — | | | | 1,999,999 | | | | 98,944 | | | | — | | | | 26,444 | | | | 2,622,695 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael Bayer Former Executive Vice President, Global Sales | | | 2017 | | | | 452,404 | | | | — | | | | 1,199,999 | | | | 0 | | | | — | | | | 1,230,557 | | | | 2,882,960 | | | | 2016 | | | | 547,308 | | | | — | | | | 2,399,997 | | | | 836,124 | | | | — | | | | 85,453 | | | | 3,868,882 | | | | 2015 | | | | 497,358 | | | | — | | | | 1,499,993 | | | | 651,222 | | | | — | | | | 140,558 | | | | 2,789,131 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table ($) | | Name and Principal Position (a) | | Year (b) | | | Salary (c) | | | Bonus (d)(1) | | | Stock Awards (e)(2) | | | Option Awards (f)(3) | | | Non-Equity Incentive Plan Compensation (g)(4) | | | Change in Pension Value (h)(5) | | | All Other Compensation (i)(6) | | | Total (k) | | Michael Hayford President & Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | | 634,615 | | | | 1,010,959 | | | | 5,000,011 | | | | 7,499,881 | | | | — | | | | — | | | | 94,423 | | | | 14,239,889 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Frank Martire Executive Chairman | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | | 409,616 | | | | 662,671 | | | | 2,249,988 | | | | 3,750,354 | | | | — | | | | — | | | | 108,116 | | | | 7,180,745 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Owen Sullivan Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | | 292,789 | | | | 482,671 | | | | 2,250,000 | | | | 3,749,994 | | | | — | | | | — | | | | 74,071 | | | | 6,849,525 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Andre Fernandez Executive Vice President & Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | | 187,500 | | | | 267,551 | | | | 3,000,011 | | | | 999,998 | | | | — | | | | — | | | | 57,867 | | | | 4,512,927 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Daniel Campbell Executive Vice President, Global Sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 | | | | 497,596 | | | | 500,000 | | | | 5,000,011 | | | | 499,996 | | | | — | | | | — | | | | 9,970 | | | | 6,507,573 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | William Nuti Chairman Emeritus and Consultant; Former Chairman of the Board and Chief Executive Officer | | | 2018 | | | | 361,539 | | | | — | | | | 5,000,016 | | | | 2,500,000 | | | | — | | | | — | | | | 11,934,051 | | | | 19,795,606 | | | | 2017 | | | | 1,000,000 | | | | — | | | | 9,999,991 | | | | — | | | | 1,160,984 | | | | — | | | | 274,043 | | | | 12,435,018 | | | | 2016 | | | | 1,000,000 | | | | — | | | | 14,999,995 | | | | — | | | | 2,756,812 | | | | — | | | | 433,460 | | | | 19,190,267 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Robert Fishman Senior Advisor; Former Executive Vice President, Chief Financial Officer and Chief Accounting Officer | | | 2018 | | | | 625,000 | | | | — | | | | 1,333,318 | | | | 666,665 | | | | 215,714 | | | | (20,782 | ) | | | 26,645 | | | | 2,846,560 | | | | 2017 | | | | 625,000 | | | | — | | | | 1,499,998 | | | | — | | | | 321,962 | | | | 41,940 | | | | 26,645 | | | | 2,515,545 | | | | 2016 | | | | 611,539 | | | | — | | | | 4,499,995 | | | | — | | | | 928,314 | | | | 21,666 | | | | 26,645 | | | | 6,088,159 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) This column represents 2018 bonus commitments paid in early 2019 under negotiated new hire employment agreements, except that Mr. Campbell’s amount includes: (i) a negotiated new hiresign-on bonus that he must repay if he resigns during the year after his start date, and (ii) a discretionary bonus recommended by the CEO and approved by the Committee in the amount of $350,000 for his leadership on certainCompany-wide strategic directives and the achievement of various individual management objectives. (2) This column shows the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, of the stock awards granted to each named executive in the applicable year. See Note 78 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form10-K for the year ended December 31, 20172018 for an explanation of the assumptions we make in the valuation of our equity awards. Assuming achievement of the highest level of performance, the aggregate grant date fair values of the performance-based restricted stock units granted in 2017 are as follows:2018 are: Campbell: $5,500,024; Nuti: $13,750,011;$7,500,024; Fishman: $2,062,504; Benjamin: $4,812,526; Langenbahn: $3,437,490; Ciminera: $2,750,022;$1,999,994. Mr. Hayford, Mr. Martire, Mr. Sullivan, and Bayer: $1,650,023.Mr. Fernandez were hired in 2018, and did not receive performance-based restricted stock units. For additional informationmore about 2018 awards, made in 2017, see theGrants of Plan-Based Awards – 2017 Table2018 on page 72 of this proxy statement.Table. (2)(3) Represents the grant date fair value of the option awards granted in 2018. See Note 8 of the Notes to the Consolidated Financial Statements contained in the Company’s Annual Report on Form10-K for the year ended December 31, 2018 for an explanation of the assumptions we make in valuing our option awards.
(4) Given the $0 payouts under our 20172018 Annual Incentive Plan based on performance, the amounts shown for all named executives, the2018 reflect only Mr. Fishman’s 2018 EPP amount payable in August 2019. The 2018 negotiated new hire bonus commitments to Messrs. Hayford, Martire, Sullivan, Fernandez and Campbell are shown in column (1). The amounts reported for 2017 reflect onlyare comprised of amounts for performanceearned in prior years under the 2017 EPP to bethat were paid in August 2018: Nuti: $1,160,984; Fishman: $321,962; Langenbahn: $107,939; Ciminera: $98,944; Bayer: $0. Special EPP payout terms provide that due to Mr. Bayer’s separation from service on September 29, 2017, he will receive 67% of his total EPP Bank Balance (that is, $593,526) in four equal installments on March 1 and September 1 of 2018 and 2019, subject to the Company’s satisfaction of the EPP Cash Flow test for the applicable year.2018. The amounts reported for 2016 are comprised of amounts earned under our 2016 Annual Incentive Plan: Nuti: $1,024,000; Fishman: $447,774; Benjamin: $18,750; Langenbahn: $305,070; and Bayer: $399,805,Plan, plus amounts for performance under the 2016 EPP that were paid in August 2017: Nuti: $1,732,812; Fishman: $480,540; Langenbahn: $161,102; and Bayer: $436,319.2017. The entire amounts reportedCommittee terminated the EPP on February 27, 2019. Consequently, any remaining Bonus Bank balances of participants who were actively employed on the termination date, such as Mr. Fishman, are expected to be distributed in 2015 are for EPP.2020 (following any normal course distributions due in 2019). Mr. Benjamin joinedNuti’s EPP balances will be distributed in accordance with his retirement agreement. For more details, see the Company in October 2016, and is not a participant in the EPP.2018 Long-Term Incentives section above. (3)(5) The aggregate change in actuarial values of the accumulated pension benefit under the Company’s qualified pension benefit plans is applicable only applies to Mr. Fishman. For more information regardingabout pension benefits, see the20172018 Pension Benefits Table on page 75 of this proxy statement..
(4)(6) The amounts in this column consist of the aggregate incremental cost to the Company of the perquisites provided to the named executives, any insurance premiums paid by the Company with respect to life insurance for the benefit of the named executives, and contributions made by the Company to the Savings Plan, our 401(k) plan, on behalf of the named executives and certain post-termination payments for certain former executives. Additional details regarding these amounts are included in theAll Other Compensation - 2018Table andPerquisites - 2018Table,, both of which can be found below. For Mr. Bayer,Nuti, this column also includes: consulting payments of $100,000; and the amount of $3,518,132 due under the disability provisions of the EPP. In addition, in connection with Mr. Nuti’s retirement agreement and in accordance with FASB ASC Topic 718, it was necessary to modify certain outstanding stock and awards held by Mr. Nuti as of his April 30, 2018 retirement date. Thus, for Mr. Nuti, this column also includes a separation paymentthe amount of $1,180,000 which was paid under our Executive Severance Plan$8,213,418 that reflects the additional incremental fair value of all outstanding stock awards and option awards modified as part of Mr. Nuti’s retirement agreement. For more details, see theAgreements with Our Named Executives andPotential Payments Upon Termination or Change in accordance with the terms of his Separation Agreement with the Company.Control sections below.
| All Other Compensation Table |
This Table shows the value of Company-paid perquisites and lifeother personal benefits, insurance premiums, and Company matching contributions to the NCR Savings Plan, our 401(k) plan, on behalf of our named executives in 2017:2018: | | | | | | | | | | | | | | | | | All Other Compensation – 2017 ($) | | Named Executive | | Perquisites and Other Personal Benefits(1) | | | Insurance Premiums(2) | | | Company Contributions to Retirement / 401(k) Plans(3) | | | Total | | William Nuti | | | 264,011 | | | | 1,032 | | | | 9,000 | | | | 274,043 | | Robert Fishman | | | 17,000 | | | | 645 | | | | 9,000 | | | | 26,645 | | Mark Benjamin | | | 17,000 | | | | 774 | | | | 9,000 | | | | 26,774 | | Paul Langenbahn | | | 17,000 | | | | 490 | | | | 9,000 | | | | 26,490 | | Robert Ciminera | | | 17,000 | | | | 444 | | | | 9,000 | | | | 26,444 | | Michael Bayer | | | 50,131 | | | | 426 | | | | 0 | | | | 50,557 | |
| | | | | | | | | | | | | | | | | | | | | All Other Compensation – 2018 ($) | Named Executive | | Perquisites and Other Personal Benefits(1) | | Insurance Premiums(2) | | Company Contributions to Retirement / 401(k) Plans(3) | | Total | Michael Hayford | | | | 84,710 | | | | | 463 | | | | | 9,250 | | | | | 94,423 | | Frank Martire | | | | 98,598 | | | | | 268 | | | | | 9,250 | | | | | 108,116 | | Owen Sullivan | | | | 64,665 | | | | | 156 | | | | | 9,250 | | | | | 74,071 | | Andre Fernandez | | | | 48,505 | | | | | 112 | | | | | 9,250 | | | | | 57,867 | | Daniel Campbell | | | | 5,000 | | | | | 412 | | | | | 4,558 | | | | | 9,970 | | William Nuti | | | | 101,469 | | | | | 1,032 | | | | | — | | | | | 102,501 | | Robert Fishman | | | | 16,750 | | | | | 645 | | | | | 9,250 | | | | | 26,645 | |
(1) This column shows the Company’s aggregate incremental cost for the perquisites and other personal benefits described in thePerquisites - 2018 Table below. (2) This column shows the value of Company-paid premiums for life insurance for the benefit of our named executives. For Mr. Bayer, this represents such premiums paid through his separation date of September 29, 2017. (3) This column shows Company matching contributions to our 401(k) plan, which the Company also makes for ournon-executive employee participants in that plan. Because he separated from Company service before the last pay date of 2017,2018, under the plan terms no such contribution wascontributions were made for Mr. Bayer.Nuti. This Table shows the aggregate incremental cost to the Company for perquisites for our named executives in 2017.2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | Perquisites – 2017 ($) | | Named Executive | | Corporate Aircraft Usage(1) | | | Vehicle and Security(2) | | | Executive Medical Program(3) | | | Financial Planning Allowance(4) | | Relocation(5) | | | Other(6) | | | Total | | William Nuti | | | 178,892 | | | | 68,119 | | | | 5,000 | | | 12,000 | | | — | | | | — | | | | 264,011 | | Robert Fishman | | | — | | | | — | | | | 5,000 | | | 12,000 | | | — | | | | — | | | | 17,000 | | Mark Benjamin | | | — | | | | — | | | | 5,000 | | | 12,000 | | | — | | | | — | | | | 17,000 | | Paul Langenbahn | | | — | | | | — | | | | 5,000 | | | 12,000 | | | — | | | | — | | | | 17,000 | | Robert Ciminera | | | — | | | | — | | | | 5,000 | | | 12,000 | | | — | | | | — | | | | 17,000 | | Michael Bayer | | | — | | | | — | | | | 5,000 | | | 12,000 | | | 31,310 | | | | 1,821 | | | | 50,131 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Perquisites – 2018 ($) | Named Executive | | Corporate Aircraft Usage(1) | | Vehicle and Security(2) | | Executive Medical Program(3) | | Financial Planning Allowance(4) | | Relocation(5) | | Other(6) | | Total | Michael Hayford | | | | 15,980 | | | — | | | | 5,000 | | | | | 12,000 | | | 51,730 | | — | | | | 84,710 | | Frank Martire | | | | 34,883 | | | — | | | | 10,000 | | | | | 12,000 | | | 41,715 | | — | | | | 98,598 | | Owen Sullivan | | | | — | | | — | | | | 5,000 | | | | | 12,000 | | | 47,665 | | — | | | | 64,665 | | Andre Fernandez | | | | — | | | — | | | | 5,000 | | | | | 6,000 | | | 37,505 | | — | | | | 48,505 | | Daniel Campbell | | | | — | | | — | | | | 5,000 | | | | | — | | | — | | — | | | | 5,000 | | William Nuti | | | | 44,953 | | | 28,418 | | | | 5,000 | | | | | 12,000 | | | — | | 11,098 | | | | 101,469 | | Robert Fishman | | | | — | | | — | | | | 5,000 | | | | | 11,750 | | | — | | — | | | | 16,750 | |
(1) This column shows the Company’s incremental cost for personal usage of the corporate aircraft. We calculated this incremental cost by determining the variable operating cost to the Company, including items such as fuel, landing and terminal fees, crew travel expenses and operational maintenance. Expenses determined to be less variable in nature, such as general administration, depreciation and pilot compensation, were not included in this incremental cost. On occasion, family members and close associates traveled with or at the authorization of our CEO on corporate aircraft; the Company incurred de minimis incremental costs as a result of such travel, which costs are included in the Table. (2) This column shows Company payments for the Company-provided car and driver that the Company requiresrequired Mr. Nuti to use for security purposes. (3) This column shows the Company-paid maximum amount available to named executives for medical diagnostic services under our Executive Medical Exam Program. Though some executives may not use the maximum, for privacy reasons we choose to disclose the maximum benefit (rather than the amount actually used). (4) This column shows the Company-paid amounts for financial planning assistance under our Executive Financial Planning Allowance Program. (5) This column shows relocation expenses paid on Mr. Bayer’s behalf related to hisour named executives. Included in these relocation to our U.S. Company (includes a $4,270figures are the following taxgross-up).gross-up amounts: Mr. Hayford: $23,235; Mr. Martire: $16,220; Mr. Sullivan: $22,170; Mr. Fernandez: $15,320. (6) This column represents expenses paid on Mr. Bayer’sNuti’s behalf related to COBRA coverage from the date of his separation from service on September 29, 2017retirement as of April 30, 2018 through December 31, 20172018 under the terms of his SeparationMedical Benefits Agreement with the Company. | Agreements with Our Named Executives |
Our named executives have agreements with the Company that generally describe, among other things, their initial base salaries, bonus opportunities and equity awards, as well as benefit plan participation and the terms of certainnon-competition,non-solicitation, confidentiality and other covenants that apply in the event of employment termination. The Company’s annual equity award agreements with the named executives also include suchapplicable restrictive covenants. Changes to named executive compensation may be made from time to time, as noted in theCompensation Discussion & Analysis. However, the These agreements generally are not updated to reflect theselater compensation changes. Mr. Nuti has a retirement agreement as described below.
| | Agreement with Our President & Chief Executive Officer |
Mr. Hayford: Mr. Hayford’s April 27, 2018 employment agreement describes his initial base salary, incentive opportunities and awards, benefit plan participation and related items including noncompete and other restrictive covenants. His 2018 new hire equity awards included options and time-based RSUs shown in theOutstanding Equity Award at Fiscal Year-End 2018 Table below. For 2018, NCR agreed that Mr. Hayford’s MIP payout would be at least target (prorated for 2018 service), and for each of 2019 and 2020 his annual LTI award would have an aggregate grant value of at least $10 million, with $2.5 million more in value for 2019 if our common stock were to trade at $40 per share or more for at least fifteen trading days during the period from May 1, 2018 through February 15, 2019. The agreement also provides for Mr. Hayford’s Executive Severance Plan participation with a separation benefit of one and one-half times (1.5x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier I separation benefit of three times (3x) base salary plus target bonus. If his employment is terminated (other than for cause) or if he resigns for good reason, under the agreement Mr. Hayford’s unvested 2018 equity awards vest immediately, and his 2018 options remain exercisable for 1 year (or until earlier expiration). “Cause” generally means grounds for cause under our Change in Control Severance Plan, felony conviction or material Code of Conduct violation. “Good reason” generally means assignment of duties inconsistent with position, authority, duties or responsibilities or diminution in such items, relocation over 40 miles or material breach of employment agreement or 2018 equity agreements. | | Agreement with Our Executive Chairman of the Board |
Mr. Martire’s April 27, 2018 employment agreement describes his initial base salary, incentive opportunities and awards, benefit plan participation and related items including noncompete and other restrictive covenants. His 2018 new hire equity awards included options and time-based RSUs shown in theOutstanding Equity Awards at Fiscal Year-End 2018 Table below. For 2018, NCR agreed that Mr. Martire’s MIP payout would be at least target (prorated for 2018 service), and for each of 2019 and 2020 his annual LTI award would have an aggregate grant value of at least $4.5 million, with $1.5 million more in value for 2019 if our common stock were to trade at $40 per share or more for at least fifteen trading days during the period from May 1, 2018 through February 15, 2019. The agreement also provides for Mr. Martire’s Executive Severance Plan participation with a separation benefit of one andone-half times (1.5x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier I separation benefit of three times (3x) base salary plus target bonus. If his employment is terminated (other than for cause) or if he resigns for good reason, under the agreement Mr. Martire’s unvested 2018 equity awards vest immediately, and his 2018 options remain exercisable for 1 year (or until earlier expiration). “Cause” and “good reason” generally have meanings similar to those noted for Mr. Hayford above. | | Agreements with Our CEOOther Current Executives |
We entered intoMr. Sullivan: Mr. Sullivan’s July 18, 2018 employment agreement describes his initial base salary as Chief Operating Officer, incentive opportunities and awards, benefit plan participation and related items including noncompete and other restrictive covenants. His 2018 new hire equity awards included options and time-based RSUs as shown in theOutstanding Equity Awards at Fiscal Year-End 2018 Table below. For 2018, NCR agreed that his MIP payout would be at least target (prorated for 2018 service), and for 2019 his annual LTI award would have an aggregate grant value of at least $4.5 million. The agreement also provides for Mr. Sullivan’s Executive Severance Plan participation with a separation benefit of one andone-half times (1.5x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier I separation benefit of three times (3x) base salary plus target bonus. If his employment is terminated (other than for cause) or if he resigns for good reason, under the Agreement Mr. NutiSullivan’s unvested 2018 equity awards vest immediately, and his 2018 option awards remain exercisable for 1 year (or until earlier expiration). “Cause” and “good reason” generally have the same meanings noted for Mr. Hayford above.
Mr. Fernandez: Mr. Fernandez’s August 27, 2018 employment agreement describes his initial base salary as EVP and Chief Financial Officer, incentive opportunities and awards, benefit plan participation and related items including noncompete and other restrictive covenants. His 2018 new hire equity awards included options and time-based RSUs as shown in theOutstanding Equity Awards at Fiscal Year-End 2018 Table below. For 2018, NCR agreed that his MIP payout would be at least target (prorated for 2018 service), including payment of the target Customer Success component of the MIP, and for 2019 his annual LTI award would have an aggregate grant value of at least $3 million. The agreement also provides for Mr. Fernandez’s Executive Severance Plan participation with a separation benefit of one andone-half times (1.5x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier I separation benefit of three times (3x) base salary plus target bonus. If Mr. Fernandez’s employment is terminated (other than for cause) or if he resigns for good reason (i) his unvested 2018 equity awards vest immediately, (ii) his 2018 options remain exercisable for 1 year (or until earlier expiration), (iii) if termination occurs during the period that begins six months after a grant or vesting date for a particular equity grant and that ends 364 days after that same grant or vesting date for a particular equity grant Mr. Fernandez will be entitled to full vesting of the equity tranche for that particular grant that would otherwise vest on July 29,the scheduled vesting date next following the date of termination, with any option tranche so vesting remaining exercisable until the earlier of the first anniversary of the employment termination or the option expiration date, (iv) if termination occurs after the end of a fiscal year, he will receive any unpaid bonus for that year based on Company performance, and (v) if termination occurs in the last half of the year, he will receive a prorated bonus for that year, based on his service and Company performance. “Cause” and “good reason” generally have the same meanings noted for Mr. Hayford above. Mr. Campbell: Mr. Campbell’s employment agreement dated December 28, 2017 describes his initial base salary as EVP, NCR Global Sales, incentive opportunities and awards, benefit plan participation and related items including noncompete and other restrictive covenants. Hissign-on award was a March 1, 2018 award of Performance-Vesting RSUs shown in theOutstanding Equity Awards at Fiscal Year-End 2018 Table below. He also received a cashsign-on bonus of $150,000 (subject to repayment if he resigns during the first year employed). For 2018, NCR agreed that his annual LTI award would have an aggregate grant value of at least $1.5 million. The agreement also provides for Mr. Campbell’s Executive Severance Plan participation with a separation benefit of one times (1x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier II separation benefit of two times (2x) base salary plus target bonus. If his employment is terminated (other than for cause) or if he resigns for good reason during his first two years of employment, under the agreement Mr. Campbell’s unvested 2018 new hire and 2018 annual equity awards vest immediately (with RSUs subject to performance conditions vesting at “target”). “Cause” and “good reason” have meanings similar to those noted for Mr. Hayford above. | | Agreements with Former Executives |
The executives below no longer served as executive officers as of December 31, 2018. Mr. Nuti: Mr. Nuti’s 2005 when he becameemployment agreement, as amended, described his initial base salary as our former President and Chief Executive Officer. This agreement, which was amended on July 26, 2006Officer, incentive opportunities and December 18, 2008, describes (among other things) his initial base salary, bonus opportunity and equity award, as well asawards, benefit plan participation.participation and related items, including noncompete and other restrictive covenants. The terms of the arrangement, whichas amended, were determined through negotiation provide that in the event we terminateand provided for various severance benefits if NCR terminated his employment (other than for cause) or if he voluntarily terminates employmentresigned for good reason, he would receive the severance-related payments and benefits listed below, which are conditioned upon Mr. Nuti signing a release of claims against us and compliance with the restrictive covenants described above: | · | | A payment equal to 150 percent of his annual base salary;
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| · | | A payment equal to 150 percent of his target bonus opportunity under our MIP;
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| · | | A payment equal to a pro rata portion of the applicable award payout under our MIP for the year in which the severance occurs; and
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| · | | Medical benefits for him and his dependents, equal to the level he received during his employment, for a period of 18 months.
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Mr. Nuti’s agreement defines “cause” and “good reason” by reference to ourChangereason. In 2015, in Control Severance Plan (see page 77), except the following additional reasons qualify as “good reason” for him to terminate employment: (i) a reduction in his job title, (ii) a material adverse change in his position, office or duties (including removal ornon-re-election to the Board), or (iii) a material breachrecognition of his agreement by the Company. In the event Mr. Nuti’s employment terminates in connection with a change in control, he would receive payments and benefits under ourChange in Control Severance Plan described on page 77, and not under the agreement. Further, if the Executive Severance Plan described on pages 79-82 provides greater benefits to Mr. Nutileadership role in the event of his termination without cause not connected to a change of control, he would receive benefits under the Executive Severance Plan, and not under the agreement.
On March 5, 2015,Company’s transformation, the Committee approved ana Medical Benefits Agreement for Mr. Nuti providing for continued participation in certain of the Company’s medical benefit plans at such time in the future as he ceases to be employed by the Company. The Committee made this decision in recognition of his leadership of the Company’s transformation to a software and solutions leader in consumer transaction technologies. Under this Agreement, Mr. Nuti will be eligible to participate in the Company’sour active employee medical plan until age 65 (on the same basis as the Company’s active employees), and thereafter he will be eligible to participate in the Company’sourpost-65 retiree Medicare supplement plan which providesproviding for a fixed annual subsidy for qualified Medicare supplement or other qualified medical expenses through a retiree reimbursement account. Mr. Nuti retired from employment and was appointed to the honorary position of Chairman Emeritus of our Board effective April 30, 2018. He was retained on a part-time basis as a consultant for transition and continuing advisory services. His
| Agreements With Other Named Executives
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We entered into anretirement agreement with Mark D. Benjamin on September 16, 2016, pursuant to which he was offered employment as President and Chief Operating Officer of the Company. The agreement provided for Mr. Benjamin’s initial base salary, annual bonus plan and long-term incentive plan participation. For 2017, the Company agreed that Mr. Benjamin’s LTI award would include performance-based and time-based restricted stock units with an aggregate value of no less than $3.5 million. With respect to severance, the agreement provides that Mr. Benjamin will participate in the NCR Executive Severance Plan with a separation benefit equal to one andone-half times (1.5x) his annual base salary and target bonus (as defined in the plan) in the event of a qualifying termination, with termination for “cause” being defined for Mr. Benjamin thereunder as a termination of employment by the Company in connection with: (a) conviction (as defined under the plan) for committing a felony under U.S. federal law or the law of the state or country in which such action occurred, (b) dishonesty in the course of fulfilling employment duties, (c) failure to perform substantially employment duties in any material respect, (d) a material violation of the Company’s Code of Conduct, or (e) such other events as shall be determined by the plan administrator and communicated in writing. The agreement further provides for Mr. Benjamin’s participation in the Amended and Restated NCR Change in Control Severance Plan with a Tier I benefit level equal to three times (3x) his annual base salary and target
bonus (as defined in the plan) in the event of a qualifying termination. He will also be entitled to immediate vesting of his new hire equity award and 2017 annual equity award in the event of a qualifying termination, provided applicable performance goals are met.
We entered into an agreement with Mr. Fishman on March 17, 2010 when we offered him employment as Senior Vice President and Chief Financial Officer. The agreement describes (among other things) his initial base salary, bonus opportunity and equity award, as well as benefit plan participation. We have not entered into any separate employment agreement with Mr. Langenbahn or Mr. Ciminera. However, in connection with their recent promotions, we provided each of these executive with a promotional letter generally describing, among other things, their base salaries, bonus opportunities and equity awards, as well as benefit plan participation.
We entered into agreements with Mr. Bayer in 2014 and 2015, when he was hired as our Senior Vice President, Retail Solutions Division, and when he relocated to the Company’s U.S. offices, respectively. These agreements describe, among other things, his initial base salary, bonus opportunity, equity award and benefit plan participation, as well as his relocationincluding consultant terms and benefits. In connection with his separation from service with the Company, we entered into a Separation Agreement and General Release with Mr. Bayer, the terms of which are described underPotential Payments Upon Termination or Change in Control below.
Mr. Fishman: Mr. Fishman’s March 17, 2010 employment agreement describes his initial base salary as Senior Vice President and Chief Financial Officer, his incentive opportunities and awards, his benefit plan participation and related items, including noncompete and restrictive covenants. The agreement also provides for Mr. Fishman’s Executive Severance Plan participation with a separation benefit of one times (1x) base salary plus target bonus, and Change in Control Severance Plan participation with a Tier II separation benefit of two times (2x) base salary plus target bonus. On July 24, 2018, Mr. Fishman announced his decision to retire from NCR effective at an undetermined time in the future. As of August 29, 2018, he became our Senior Advisor, and ceased holding the positions of Executive Vice President, Chief Financial Officer and Chief Accounting Officer. He continues to assist with transition and advisory services, and NCR expects to enter into a retirement agreement with him at a later date. | Grants of Plan-Based Awards Table |
The Table below shows the Committee’s equity andnon-equity incentive plan awards to our named executives in 2017.2018. Equity awards were made under our StockPlan. Non-equity awards were made under our Annual Incentive Plan (MIP and Customer Success Bonus)Bonus, as applicable) and, EPP.for Mr. Fishman only, a payout under our EPP earned before 2018. These plans and related awards are described in theCompensation Discussion & Analysis. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grants of Plan-Based Awards – 2017 ($) | | | | | | | | | | | | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Units | | Grant Date Fair Value of Stock Awards(3) | | Named Executive | | Award Type | | Grant Date | | | Threshold | | | Target | | | Max | | | Threshold | | | Target | | | Max | | | | William Nuti | | Management Incentive Plan | | | | | | | 560,000 | | | | 1,400,000 | | | | 4,200,000 | | | | — | | | | — | | | | — | | | — | | | — | | | Customer Success | | | | | | | — | | | | 100,000 | | | | 100,000 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 1,160,984 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 38,156 | | | | 152,625 | | | | 228,938 | | | — | | | 7,499,993 | | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 50,875 | | | | 50,875 | | | — | | | 2,499,998 | | Robert Fishman | | Management Incentive Plan | | | | | | | 250,000 | | | | 625,000 | | | | 1,875,000 | | | | — | | | | — | | | | — | | | — | | | — | | | | Customer Success | | | | | | | — | | | | 62,500 | | | | 62,500 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 321,962 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 5,724 | | | | 22,894 | | | | 34,341 | | | — | | | 1,125,011 | | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 7,631 | | | | 7,631 | | | — | | | 374,987 | | Mark Benjamin | | Management Incentive Plan | | | | | | | 345,000 | | | | 862,500 | | | | 2,587,500 | | | | — | | | | — | | | | — | | | — | | | — | | | Customer Success | | | | | | | — | | | | 75,000 | | | | 75,000 | | | | — | | | | — | | | | — | | | — | | | — | | | | Cash Bonus Uplift Program | | | | | | | — | | | | 431,250 | | | | 431,250 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 13,355 | | | | 53,419 | | | | 80,129 | | | — | | | 2,625,010 | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 17,806 | | | | 17,806 | | | — | | | 874,987 | | Paul Langenbahn | | Management Incentive Plan | | | | | | | 238,077 | | | | 595,193 | | | | 1,785,579 | | | | — | | | | — | | | | — | | | — | | | — | | | | Customer Success | | | | | | | — | | | | 59,519 | | | | 59,519 | | | | — | | | | — | | | | — | | | — | | | — | | | | Cash Bonus Uplift Program | | | | | | | — | | | | 297,597 | | | | 297,597 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 107,939 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 9,539 | | | | 38,156 | | | | 57,234 | | | — | | | 1,874,986 | | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 12,719 | | | | 12,719 | | | — | | | 625,012 | | Robert Ciminera | | Management Incentive Plan | | | | | | | 198,923 | | | | 497,308 | | | | 1,491,924 | | | | — | | | | — | | | | — | | | — | | | — | | | Customer Success | | | | | | | — | | | | 49,731 | | | | 49,731 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 98,944 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 7,631 | | | | 30,525 | | | | 45,788 | | | — | | | 1,499,999 | | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 10,175 | | | | 10,175 | | | — | | | 500,000 | | Michael Bayer | | Management Incentive Plan | | | | | | | 180,962 | | | | 452,404 | | | | 1,357,212 | | | | — | | | | — | | | | — | | | — | | | — | | | | Customer Success | | | | | | | — | | | | 45,240 | | | | 45,240 | | | | — | | | | — | | | | — | | | — | | | — | | | | Cash Bonus Uplift Program | | | | | | | — | | | | 226,202 | | | | 226,202 | | | | — | | | | — | | | | — | | | — | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 593,526 | | | | — | | | | — | | | | — | | | | — | | | — | | | — | | | | Performance-Based RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 4,579 | | | | 18,315 | | | | 27,473 | | | — | | | 899,999 | | | | Performance-Vesting RSU | | | 02/27/17 | | | | — | | | | — | | | | — | | | | 0 | | | | 6,105 | | | | 6,105 | | | — | | | 300,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Grants of Plan-Based Awards – 2018 ($) | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | All Other Stock Awards: Number of Units | | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise Price of Option Awards ($/Sh) | | | Grant Date Fair Value of Stock Awards(3) | | Named Executive | | Award Type | | Grant Date | | | Threshold | | | Target | | | Max | | | Threshold | | Target | | Max | Michael Hayford | | Management Incentive Plan | | | | | | | 1,010,959 | | | | 1,010,959 | | | | 2,021,918 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 05/01/18 | | | | | | | | | | | | | | | | | | | | | | | | | | 266,634 | | | | 31.15 | | | | 2,499,960 | | | | Stock Options | | | 05/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 533,268 | | | | 31.15 | | | | 4,999,921 | | | | Time-Based RSU | | | 05/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | 160,514 | | | | — | | | | — | | | | 5,000,011 | | Frank Martire | | Management Incentive Plan | | | | | | | 662,671 | | | | 662,671 | | | | 1,325,342 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 06/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 165,396 | | | | 30.13 | | | | 1,500,141 | | | | Stock Options | | | 06/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 248,094 | | | | 30.13 | | | | 2,250,213 | | | | Time-Based RSU | | | 06/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | 74,676 | | | | — | | | | — | | | | 2,249,988 | | Owen Sullivan | | Management Incentive Plan | | | | | | | 450,493 | | | | 450,493 | | | | 900,986 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Customer Success | | | | | | | — | | | | 32,178 | | | | 32,178 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 08/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 178,784 | | | | 27.19 | | | | 1,499,997 | | | | Stock Options | | | 08/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 268,176 | | | | 27.19 | | | | 2,249,997 | | | | Time-Based RSU | | | 08/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | 82,751 | | | | — | | | | — | | | | 2,250,000 | | Andre Fernandez | | Management Incentive Plan | | | | | | | 246,147 | | | | 246,147 | | | | 492,294 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Customer Success | | | | | | | — | | | | 21,404 | | | | 21,404 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 09/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 114,155 | | | | 28.41 | | | | 999,998 | | | | Time-Based RSU | | | 09/01/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | 105,597 | | | | — | | | | — | | | | 3,000,011 | | Daniel Campbell | | Management Incentive Plan | | | | | | | 230,000 | | | | 575,000 | | | | 1,725,000 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Customer Success | | | | | | | — | | | | 57,500 | | | | 57,500 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 02/23/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 51,020 | | | | 32.57 | | | | 499,996 | | | | Performance-Based RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 6,141 | | 15,352 | | 30,704 | | | — | | | | — | | | | — | | | | 500,015 | | | | Performance-Vesting RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 0 | | 15,351 | | 15,351 | | | — | | | | — | | | | — | | | | 499,982 | | | | Performance-Vesting RSU | | | 03/01/18 | | | | — | | | | — | | | | — | | | 0 | | 90,992 | | 90,992 | | | — | | | | — | | | | — | | | | 3,000,006 | | | | Performance-Vesting RSU(4) | | | 05/01/18 | | | | — | | | | — | | | | — | | | 0 | | 32,103 | | 32,103 | | | — | | | | | | | | | | | | 1,000,008 | | William Nuti | | Management Incentive Plan | | | | | | | 202,462 | | | | 506,154 | | | | 1,518,462 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Customer Success | | | | | | | — | | | | 36,154 | | | | 36,154 | | | — | | — | | — | | | — | | | | | | | | | | | | — | | | | Equity Award Modification | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,213,418 | | | | Stock Options | | | 02/23/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 255,102 | | | | 32.57 | | | | 2,500,000 | | | | Performance-Based RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 30,703 | | 76,758 | | 153,516 | | | — | | | | | | | | | | | | 2,500,008 | | | | Performance-Vesting RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 0 | | 76,758 | | 76,758 | | | — | | | | | | | | | | | | 2,500,008 | | Robert Fishman | | Management Incentive Plan | | | | | | | 250,000 | | | | 625,000 | | | | 1,875,000 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Customer Success | | | | | | | — | | | | 62,500 | | | | 62,500 | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Economic Profit Plan | | | | | | | — | | | | 215,714 | | | | — | | | — | | — | | — | | | — | | | | — | | | | — | | | | — | | | | Stock Options | | | 02/23/18 | | | | — | | | | — | | | | — | | | — | | — | | — | | | — | | | | 68,027 | | | | 32.57 | | | | 666,665 | | | | Performance-Based RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 8,188 | | 20,469 | | 40,938 | | | — | | | | — | | | | — | | | | 666,675 | | | | Performance-Vesting RSU | | | 02/23/18 | | | | — | | | | — | | | | — | | | 0 | | 20,468 | | 20,468 | | | — | | | | — | | | | — | | | | 666,643 | |
(1) This column shows potential award levels based on performance under our 20172018 Annual Incentive Plan, (whichwhich includes our MIP ourand Customer Success bonus (as applicable), plus previously earned amounts under our Cash Bonus Uplift Program) plus our EPP.EPP for Mr. Fishman. The Customer Success metric is “make or miss.” The Cash Bonus Uplift Program, which provides an additional bonus opportunity only when “stretch” goals are achieved, is “make or miss,” and is subject to a cap of the total annual opportunity under the MIP. Only Mr. Benjamin, Mr. Langenbahn and Mr. Bayer were eligible to participate in the Cash Bonus Uplift Program in 2017. No new EPP awards were made in 2017,2018, and no additional amounts were credited to participant accounts (Bonus Banks) under the EPP in 2017.2018. However, a portion of EPP Bonus Banks earned and accumulated in prior years is paid out each year to the extent required by the EPP. Because awards are determined under a formula and the Committee does not set a target amount under the EPP, in accordance with SEC guidelines the target amounts shown in the Table are the Bonus Bank amounts that are expected to be paid in August 20182019 for all named executives except Mr. Bayer. Under Mr. Bayer’s Separation Agreement, he will receive 67% of his total Bonus Bank (that is, $593,526 of his total Bonus Bank of $885,859) in four equal installments on March 1 and September 1 of 2018 and 2019,Fishman, subject to the Company’s satisfaction of the EPP Cash Flow test. Mr. Bayer’s Separation Agreement requires that he repay these amounts to the Company in the event he breaches certainnon-competition or other covenants in that Agreement. For more information about our EPP, including details relating to the Committee’s termination of the EPP on February 27, 2019 and final distribution of Bonus Bank balances, see the20172018 Long-Term Incentives section above starting on page 57.section. Mr. Nuti became ineligible to receive any bonus amount under the MIP and Customer Success component due to his retirement during 2018. (2) This column shows the threshold, target and maximum shares that could be received for performance-based RSUs and performance-vesting RSUs awarded in 2017.2018. (3) This column shows the grant date fair value of equity awards, as determined in accordance with FASB ASC Topic 718. The grant date fair values of performance-based and performance-vesting RSU awards are based on the probable outcome of applicable performance conditions as of the grant date. The performance-based awards are subject to a three-year performance period and an additional time-based vesting condition; however, as described in the20172018 Long-Term Incentives section above, the 20172018 fiscal year performance conditions for these performance-based RSUs were not satisfied, and thus 100% of such performance-based RSUs were forfeited. The performance-vesting awards are earned only upon the achievement of apre-determined performance condition, and once earned, vest 1/3 on each anniversary of the grant date, generally subject to the executive’s continued service with the Company through the applicable vesting dates. For Mr. Nuti, this amount also includes the additional incremental cost under FASB ASC Topic 718 as a result of modification of his awards pursuant to the terms of his Retirement Agreement. (4) Special recognition Ad hoc award subject to the same terms and conditions as the 2018 annual performance-vesting RSUs described above. | Outstanding Equity Awards at FiscalYear-End 20172018 Table |
The following table sets forth information concerning all of the outstanding LTI awards held by each named executive as of December 31, 2018. Mr. Nuti did not hold any LTI awards as of December 31, 2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Outstanding Equity Awards at FiscalYear-End – 2017 | | | | | | Option Awards(1) | | Restricted Stock Unit Awards | | Named Executive | | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | Number of Stock Units That Have Not Vested (#) | | | Market Value of Stock Units That Have Not Vested ($)(2) | | | Equity Incentive Plan Awards: Number of Unearned Stock Units That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Stock Units That Have Not Vested ($) | | William Nuti | | 02/27/2017(3) | | | | | | | | | | | | | 50,875 | | | | 1,729,241 | | | | | | | | | | | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/24/2016(5) | | | | | | | | | | | | | 35,644 | | | | 1,211,540 | | | | | | | | | | | | 02/24/2016(6) | | | | | | | | | | | | | 237,702 | | | | 8,079,491 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 334,896 | | | | 11,383,115 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 334,896 | | | | 11,383,115 | | | | | | | | | | | | 02/23/2015(5) | | | | | | | | | | | | | 22,297 | | | | 757,875 | | | | | | | | | | | | 02/23/2015(6) | | | | | | | | | | | | | 229,766 | | | | 7,809,746 | | | | | | | | | | | | 02/23/2010 | | | 63,552 | | | | 12.81 | | | 02/22/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | Robert Fishman | | 02/27/2017(3) | | | | | | | | | | | | | 7,631 | | | | 259,378 | | | | | | | | | | | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/24/2016(5) | | | | | | | | | | | | | 10,693 | | | | 363,455 | | | | | | | | | | | | 02/24/2016(6) | | | | | | | | | | | | | 71,311 | | | | 2,423,861 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 100,469 | | | | 3,414,941 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 100,469 | | | | 3,414,941 | | | | | | | | | | | | 02/23/2015(5) | | | | | | | | | | | | | 3,066 | | | | 104,213 | | | | | | | | | | | | 02/23/2015(6) | | | | | | | | | | | | | 31,593 | | | | 1,073,846 | | | | | | | | | | | | | | | | | | | Mark Benjamin | | 02/27/2017(3) | | | | | | | | | | | | | 17,806 | | | | 605,226 | | | | | | | | | | | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 11/01/2016(8) | | | | | | | | | | | | | 183,137 | | | | 6,224,827 | | | | | | | | | | | | | | | | | | | Paul Langenbahn | | 02/27/2017(3) | | | | | | | | | | | | | 12,719 | | | | 432,319 | | | | | | | | | | | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/24/2016(5) | | | | | | | | | | | | | 7,129 | | | | 242,315 | | | | | | | | | | | | 02/24/2016(6) | | | | | | | | | | | | | 47,541 | | | | 1,615,919 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 66,979 | | | | 2,276,616 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 66,979 | | | | 2,276,616 | | | | | | | | | | | | 02/23/2015(5) | | | | | | | | | | | | | 1,812 | | | | 61,590 | | | | | | | | | | | | 02/23/2015(6) | | | | | | | | | | | | | 18,668 | | | | 634,525 | | | | | | | | | | | | | | | | | | | Robert Ciminera | | 02/27/2017(3) | | | | | | | | | | | | | 10,175 | | | | 345,848 | | | | | | | | | | | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/24/2016(5) | | | | | | | | | | | | | 4,990 | | | | 169,610 | | | | | | | | | | | | 02/24/2016(6) | | | | | | | | | | | | | 33,278 | | | | 1,131,119 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 46,886 | | | | 1,593,655 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 46,885 | | | | 1,593,621 | | | | | | | | | | | | 02/23/2015(5) | | | | | | | | | | | | | 1,812 | | | | 61,590 | | | | | | | | | | | | 02/23/2015(6) | | | | | | | | | | | | | 18,668 | | | | 634,525 | | | | | | | | | | | | | | | | | | | Michael Bayer | | 02/27/2017(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/24/2016(6) | | | | | | | | | | | | | 17,393 | | | | 591,188 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 17,146 | | | | 582,793 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 17,146 | | | | 582,793 | | | | | | | | | | | | 02/23/2015(6) | | | | | | | | | | | | | 30,588 | | | | 1,039,686 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Outstanding Equity Awards at FiscalYear-End – 2018 | | | | | | Option Awards | | | Restricted Stock Unit Awards | | Named Executive | | Grant Date | | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | | | Option Exercise Price ($) | | Option Expiration Date | | | Number of Stock Units That Have Not Vested (#) | | | Market Value of Stock Units That Have Not Vested ($)(2) | | | Equity Incentive Plan Awards: Number of Unearned Stock Units That Have Not Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Stock Units That Have Not Vested ($) | | Michael Hayford | | 05/01/2018 | | | 266,634 | | | 31.15 | | | 04/30/2025 | | | | | | | | | | | | | | | | | | | | 05/01/2018 | | | 533,268 | | | 31.15 | | | 04/30/2025 | | | | | | | | | | | | | | | | | | | | 05/01/2018(3) | | | | | | | | | | | | | 160,514 | | | | 3,704,663 | | | | | | | | | | Frank Martire | | 06/01/2018 | | | 165,396 | | | 30.13 | | | 05/31/2025 | | | | | | | | | | | | | | | | | | | | 06/01/2018 | | | 248,094 | | | 30.13 | | | 05/31/2025 | | | | | | | | | | | | | | | | | | | | 06/01/2018(3) | | | | | | | | | | | | | 74,676 | | | | 1,723,522 | | | | | | | | | | Owen Sullivan | | 08/01/2018 | | | 178,784 | | | 27.19 | | | 07/31/2025 | | | | | | | | | | | | | | | | | | | | 08/01/2018 | | | 268,176 | | | 27.19 | | | 07/31/2025 | | | | | | | | | | | | | | | | | | | | 08/01/2018(3) | | | | | | | | | | | | | 82,751 | | | | 1,909,893 | | | | | | | | | | Andre Fernandez | | 09/01/2018 | | | 114,155 | | | 28.41 | | | 08/31/2025 | | | | | | | | | | | | | | | | | | | | 09/01/2018(3) | | | | | | | | | | | | | 105,597 | | | | 2,437,179 | | | | | | | | | | Daniel Campbell | | 02/23/2018 | | | 51,020 | | | 32.57 | | | 02/22/2025 | | | | | | | | | | | | | | | | | | | | 02/23/2018(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/23/2018(5) | | | | | | | | | | | | | 15,351 | | | | 354,301 | | | | | | | | | | | | 03/01/2018(5) | | | | | | | | | | | | | 90,992 | | | | 2,100,095 | | | | | | | | | | | | 05/01/2018(5) | | | | | | | | | | | | | 32,103 | | | | 740,937 | | | | | | | | | | Robert Fishman | | 02/23/2018 | | | 68,027 | | | 32.57 | | | 02/22/2025 | | | | | | | | | | | | | | | | | | | | 02/23/2018(4) | | | | | | | | | | | | | 0 | | | | 0 | | | | | | | | | | | | 02/23/2018(5) | | | | | | | | | | | | | 20,468 | | | | 472,401 | | | | | | | | | | | | 02/27/2017(6) | | | | | | | | | | | | | 5,088 | | | | 117,431 | | | | | | | | | | | | 02/24/2016(3) | | | | | | | | | | | | | 5,347 | | | | 123,409 | | | | | | | | | | | | 02/24/2016(7) | | | | | | | | | | | | | 71,311 | | | | 1,645,858 | | | | | | | | | | | | 02/24/2016(8) | | | | | | | | | | | | | 100,469 | | | | 2,318,825 | | | | | | | | | | | | 02/24/2016(8) | | | | | | | | | | | | | 100,469 | | | | 2,318,825 | | | | | | | | | |
(1) These awards, having vested 25%The unvested stock options will vest 1/4 on each anniversary of the grant date, are all now fully vested.generally subject to continued employment with the Company. (2) The market value of outstanding restricted stock unit awards was calculated by multiplying the number of shares shown in the table by $33.99,$23.08, which was the closing market price of NCR common stock on December 29, 2017,31, 2018, the last trading day of our fiscal year. (3) Time-based RSU where 1/3 will vest on each anniversary of the grant date, generally subject to continued employment with the Company. (4) Performance-based RSU award where the performance condition for fiscal year 2018 was not achieved, and 100% of the award has been forfeited. (3)(5) Performance-vesting RSU where the performance condition has been achieved. ProThe earned amount will vest pro rata, vesting,withone-third vesting on each anniversary of the grant date, generally subject to the named executive’s continued service with the Company through the applicable vesting dates.
(4) Performance-based(6) Performance-vesting RSU award where the performance condition for fiscal year 2017 was not achieved, and 100% of the award hasconditions have been forfeited.
(5) For the 2016 awards,one-halfsatisfied. One-half will vest on each of the next two anniversaries of the grant date. Fordate, generally subject to the 2015 awards,named executive’s continued service with the remaining award amount will vest on the next anniversary of the grant date.Company.
(6)(7) Performance-based RSU awards where the performance period has ended and the performance conditions have been satisfied. The 2016 awards will vest 100% on August 24, 2019, and the 2015 awards will vest 100% on October 23, 2018, generally subject in each case to the named executive’s continued service with the Company through the applicable vesting dates. Under his Separation Agreement with the Company, Mr. Bayer’s original awards of 37,625 RSUs for 2015 and 25,663 RSUs for 2016 have been prorated, based on service through his September 29, 2017 separation date. His remaining award amounts were forfeited.
(7)(8) Price-contingent performance-based Vision 2020 Awards, where the performance period has ended and the performance conditions have been satisfied. These awards were partially “front-loaded,” with the first portion of the award representing 50% of the 2016 target long-term value, and the remaining portion of the award representing 50% of the expected 2017 target long-term incentive value. The performance criteria for both portions of the award have been met, and the two portions will vest in full on February 24, 2019, and February 24, 2020, respectively, generally subject to the executive’s continued employment with the Company through the applicable vesting dates. Under his Separation Agreement with the Company, Mr. Bayer’s original Vision 2020 Awards of 53,584 and 53,583 RSUs, respectively, have been prorated, based on service through his September 29, 2017 separation date. His remaining amounts were forfeited.
(8) Performance-based RSU award where the performance periods have ended and the performance conditions have been satisfied. Award vested 25% on the first anniversary of the grant date. An additional 35% of the award will vest on the second anniversary, and the remaining 40% will vest on the third anniversary of the grant date, generally subject to Mr. Benjamin’s continued service with the Company through the applicable vesting dates.
| | 20172018 Option Exercises and Stock Vested Table
|
This table shows 20172018 vesting of RSUs and options exercised by the named executives during 2018. None of Mr. Hayford, Martire, Sullivan, Fernandez or Campbell held any stock options that were exercised or RSUs that vested during 2018. | | | | | | | | | | | | | Option Exercises and Stock Vested – 2018 | | | | Options | | RSUs | | Named Executive | | Number of Shares Acquired on Exercise | | Value Realized on Exercise(1) | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting(1) | | William Nuti | | 63,552 | | $1,156,011 | | | 1,246,076 | | | $ | 38,453,824 | | Robert Fishman | | — | | — | | | 42,548 | | | $ | 1,167,932 | |
(1) Value realized for performance-basedstock option exercises is the difference between the market price of the shares on the exercise date and time-basedthe exercise price of the options and the value realized for restricted stock unit awards made to our named executives. No named executives exercised stock options in 2017. | | | | | | | | | | | | | Option Exercises and Stock Vested – 2017 | | | | Options | | RSUs | | Named Executive | | Number of Shares Acquired on Exercise | | Value Realized on Exercise | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting(1) | | William Nuti | | — | | — | | | 126,444 | | | $ | 5,394,192 | | Robert Fishman | | — | | — | | | 21,361 | | | $ | 927,686 | | Mark Benjamin | | — | | — | | | 61,046 | | | $ | 1,932,106 | | Paul Langenbahn | | — | | — | | | 19,616 | | | $ | 851,623 | | Robert Ciminera | | — | | — | | | 15,268 | | | $ | 659,840 | | Michael Bayer | | — | | — | | | 44,713 | | | $ | 1,764,261 | |
(1) Value realized is the fair market value on the vesting date.
| | 20172018 Pension Benefits Table
|
The table below shows the present value of Mr. Fishman’s accrued benefit under the U.S. Pension Plan, as of December 31, 20172018 as described below. Because Messrs. Nuti, Benjamin,all other named executives joined Langenbahn, Ciminera and Bayer joined the Company after the U.S. Pension Plan closed to new entrants, they are not eligible for benefits under the U.S. Pension Plan.
| | U.S. Pension Plan – Mr. Fishman Only |
Our U.S. Pension Plan is anon-contributory,tax-qualified and broad-based pension plan that was frozen effective December 31, 2006. When this Plan was frozen, participants retained the pension benefits they already had accrued. However, no additional benefits were earned after the effective date of the freeze. This plan pays a basic monthly pension benefit and a cash balance benefit. The basic monthly benefit is a percentage of a participant’s average plan compensation, determined based on years of benefit service through December 31, 2006. The cash balance benefit is 1.50% of pay per month through December 31, 2006. The cash balance account is credited with interest until a participant commences payment of pension benefits. Mr. Fishman is the only named executive who participates in this Plan. As of December 31, 2017,2018, Mr. Fishman was not eligible for payment of any benefits under this Plan. | | | | | | | Pension Benefits – 2017 | Named Executive | | Plan Name | | Number of Years Credited Service(1) | | Present Value of Accumulated Benefit(2) | Robert Fishman | | U.S. Pension Plan | | 13.6 | | $312,543 |
| | | | | | | Pension Benefits – 2018 | Named Executive | | Plan Name | | Number of Years Credited Service(1) | | Present Value of Accumulated Benefit(2) | Robert Fishman | | U.S. Pension Plan | | 13.6 | | $291,762 |
(1) Mr. Fishman’s credited service under the U.S. Pension Plan was frozen as of December 31, 2006. As a result, his service thereunder is less than his 2425 years of employment with the Company. (2) For more on the assumptions used to quantify benefits under our U.S. Pension Plan, see Note 89 to the Consolidated Financial Statements in our Annual Report on Form10-K for the year ended December 31, 2017. 2018. | Potential Payments Upon Termination or Change in Control |
The compensation and benefits that would have been provided to our named executives (other than Mr. Bayer)Nuti), in the event of various types of employment terminations on December 31, 2017,2018, are described below and shown in the tables below. The amounts payable to Mr. BayerNuti in connection with his separation from service are also described below. For more on these items, see theRetirement Benefits,Change in Control Arrangements andSeverance Benefits sections in ourCompensation Discussion & Analysis and theAgreements with our Named Executives Section above. | Termination Connected with Change in Control |
| | Change in Control Severance Plan |
Our Amended and Restated NCR Change in Control Severance Plan (the “Change in Control Severance Plan”) provides separation benefits to our named executives only if both a Change in Control occursand employment ends in a qualifying termination. Amounts payable are based on executive “Tier” level, and payment is conditioned on the executive signing a restrictive covenant and release agreement with confidentiality and eighteen-monthnon-competition andnon-solicitation provisions. Under this plan, if the Company terminates the executive’s employment for reasons other than “cause”, death or disability, or if the executive resigns for “good reason” within two years after a Change in Control (or within six months before a Change in Control, if the executive can show that the termination occurred in connection with a Change in Control), then the Company or its successor must provide these benefits: A lump sum equal to 300 percent of annual base salary and target bonus under the Annual Incentive Plan for Tier I (Mr. NutiHayford, Mr. Martire, Mr. Sullivan, and Mr. Benjamin)Fernandez), and 200 percent of annual base salary and target bonus under the Annual Incentive Plan for Tier II (all other named executives, other than(Mr. Campbell and Mr. Bayer)Fishman); A lump sum equal to a pro rata portion of the current year target bonus under the Annual Incentive Plan, based on the number of days in the year prior to the date of termination; Three years of medical, dental and life insurance benefits for the executive and dependents at the level in effect at termination for Tier I (Mr. NutiHayford, Mr. Martire, Mr. Sullivan, and Mr. Benjamin)Fernandez), and two years of these benefits for Tier II (all other named executives, other than(Mr. Campbell and Mr. Bayer)Fishman); One year of outplacement assistance; andassistance. An excise taxgross-up, if applicable, only for individuals who were covered byMr. Nuti retired during 2018, so he no longer participates in the Change in Control Severance Plan before January 28, 2010.Plan.
“Cause” generally means the willful and continued failure to perform assigned duties or the willful engaging in illegal or gross misconduct that materially injures the Company. “Good reason” generally means: (i) reduction in duties or reporting requirements; (ii) reduction in base salary; (iii) failure to pay incentive compensation when due; (iv) reduction in target or maximum incentive opportunities; (v) failure to continue the equity award or other employee benefit programs; (vi) relocation of an executive’s office over forty miles; or (vii) successor’s failure to assume the Change in Control Severance Plan. “Change in Control” generally means any of the following: (i) third party acquisition of 30% or more of our stock; (ii) a change in our Board members such that the current incumbents and approved successors no longer make up a majority; (iii) a reorganization, merger, consolidation or sale or other disposition of substantially all of our assets in which any of the following is true – the stockholders of NCR immediately before the change in control do not hold at least 50% of the combined enterprise, there is a30%-or-more stockholder of the combined enterprise (other than as a result of conversion of the stockholder’spre-combination interest in the Company), or our Board members (immediately before the combination) do not make up a majority of the board of the combined enterprise; or (iv) stockholder approval of a complete liquidation. The general rules for equity treatment for outstanding awards granted through 2018 in the event of a Change in Control are described below. Under employment agreements, certain named executives have varied terms forsign-on or other equity awards, as described in theAgreements With Our Named Executives section and ourGrant of Plan-Based Awards - 2018 Table. Stock Options and Time-Based RSUs.RSUs. Under our Stock Plan and award agreements, the timing of any accelerated vesting for unvested stock options and time-based RSUs awarded to our named executives depends upon whether the acquirer assumes the awards in the change in control. If the acquirer does not assume the awards, they immediately vest and options become exercisable. If the acquirer does assume the awards, they vest and become exercisable if the Company terminates the named executive’s employment within 24 months of the transaction for reasons other than cause or disability, or if the named executive is subject to our Change in Control Severance Plan or other applicable severance plan and resigns for good reason within that 24 months. Such options generally remain exercisable until the earlier of the first anniversary of employment termination or the option expiration date. Traditional Performance-Based RSUs.RSUs. Under our Stock Plan and award agreements, the timing for vesting of unvested traditional performance-based RSUs depends upon whether the acquirer assumes
the awards in the change in control. If the acquirer does not assume the awards, they vest immediately, based on: target performance, if less than one year of the performance period is complete; or
| · | | target performance, if less than one year of the performance period is complete; or |
actual results, if at least one year of the performance period is complete.
| · | | actual results, if at least one year of the performance period is complete. |
If the acquirer does assume these awards, they vest at the end of the original vesting period based on: target performance, if less than one year of the performance period is complete; and
| · | | target performance, if less than one year of the performance period is complete; and |
actual results, if at least one year of the performance period is complete.
| · | | actual results, if at least one year of the performance period is complete. |
If the Company terminates the named executive’s employment within 24 months of the transaction for reasons other than cause or disability, or if the named executive is subject to our Change in Control Severance Plan or other applicable severance plan and resigns for good reason within that24-month period, traditional performance-based RSU awards will vest immediately based on: target performance, if less than one year of the performance period is complete; or
| · | | target performance, if less than one year of the performance period is complete; or |
actual results, if at least one year of the performance period is complete.
| · | | actual results, if at least one year of the performance period is complete. |
Performance-Vesting RSUs. Under our Stock Plan and award agreements, the timing for vesting of unvested performance-vesting RSUs depends upon whether the acquirer assumes the awards in the change in control. If the acquirer does not assume the awards, they vest immediately, based on target performance. If the acquirer does assume these awards, they vest at the end of the original vesting period based on actual performance. If the Company terminates the named executive’s employment within 24 months of the transaction for reasons other than cause or disability, or if the named executive is subject to our Change in Control Severance Plan or other applicable severance plan and resigns for good reason within that24-month period, performance-based RSU awards will vest immediately based on target performance. Vision 2020 LTI Awards.Awards. As of December 31, 2018, Mr. Fishman was the only named executive who held unvested Vision 2020 awards. Under our Stock Plan and award agreements, the timing for vesting of unvested Vision 2020 LTI Awards depends upon whether the acquirer assumes the awards in the change of control. If the acquirer does not assume the awards, and the change in control price is less than the stock price target of the Vision 2020 LTI Awards, then the RSUs not previously vested will be forfeited. If the change in control price is greater than or equal to the stock price target, then the RSUs not previously vested will vest immediately. If the acquirer does assume the awards in the change in control, and the change in control price is less than the stock price target of the Vision 2020 LTI Awards, then the RSUs not previously vested will be forfeited. If the change in control price is greater than or equal to the stock price target of the RSUs, then the RSUs not previously vested will remain eligible to continue to vest. | | Treatment of Economic Profit Plan Bonus Bank |
As of December 31, 2018, Mr. Nuti and Mr. Fishman were the only named executives with Bonus Bank balances under the EPP. Upon a change in control, named executives will be credited with a Bonus Credit, if any, for any performance period (or portion thereof) during which they participated in the EPP, but for which a Bonus Credit has not yet been received through the date of the change in control. Named executives generally will be paid, within 30 days after the change in control, a lump sum cash payment equal to their entire Bonus Banks without regard to the Cash Flow Test limitation described in theEconomic Profit Plan Awards Before 2017section starting on page 62. | Medical Benefits Agreement
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An Agreement with Mr. Nuti provides for continued participation in certain ofabove. On February 27, 2019, the Company’s medical benefit plans atCommittee terminated the EPP. For details about final EPP Bonus Bank distributions following such time in the future as he ceases to be employed by the Company. Under this Agreement, Mr. Nuti will be eligible to participate in the Company’s active employee medical plan until age 65 (on the same basis as the Company’s active employees), and thereafter he will be eligible to participate in the Company’spost-65 retiree Medicare supplement plan which provides a fixed annual subsidy for qualified Medicare supplement or other qualified medical expenses through a retiree reimbursement account. For more details on this Agreement,termination, see theAgreements with Our CEO2018 Long-Term Incentives section starting on page 71.above.
| Termination Not Connected With Change in Control |
| Severance Agreements and | Severance Plan |
EachOur named executive, with the exception of the CEO and our President and COO, who have individual severance agreements with the Company, isexecutives are eligible for our Executive Severance Plan. Under this plan, if a named executive’s employment is
terminated by the Company without cause (other than death or disability as defined in the plan), we provide the executive a lump sum equal to one and a half times (1x)(1.5x) base salary plus target bonus (as defined in the plan), for Mr. Hayford, Mr. Martire, Mr. Sullivan, and Mr. Fernandez, or one times (1x) base salary plus target bonus for Mr. Campbell and Mr. Fishman. Also, the named executives will receive up to eighteen months of “COBRA” medical, dental and vision coverage, and outplacement services under the Company’s outplacement program in effect on the termination date. Under their employment agreements, in the event of a qualifying termination certain named executives receive additional payments or benefits described in theAgreements With Our Named Executives section. Under our Stock Plan, the treatment of outstanding equity awards granted through 2018 when employment ends differs based on the form of equity award, the grant agreement in use at a given time, and the reason for the termination, as summarized below. Under employment agreements, certain named executives have varied terms forsign-on or other specific equity awards, as described in theAgreements With Our Named Executives section and ourGrant of Plan-Based Awards - 2018 Table. | · | | Performance-Based RSUs and Performance-Vesting RSUs.Unless determined otherwise by the Committee, unvested performance-based RSUs and, unvested performance-vesting RSUs, vest pro rata at a specified date (depending upon year of grant) if employment ends because of death, disability, retirement or Company |
Traditional Performance-Based RSUs and Performance-Vesting RSUs.In general, unless deemed by the Committee, unvested traditional performance-based RSUs and, new for 2017, unvested performance-vesting RSUs, held by a named executive will vest pro rata at a specified date (depending upon the year of issuance of the grant) if employment ends because of death, disability, retirement or Company termination without cause. The pro rata portion is determined based on the length of service during the applicable vesting period and in certain cases on our achievement of performance objectives. All unvested performance-based RSUs and performance-vesting RSUs are forfeited if a named executive resigns or is terminated for cause.
| termination without cause. The pro rata portion is determined based on the length of service during the applicable vesting period and in certain cases on our achievement of performance objectives. All unvested performance-based RSUs and performance-vesting RSUs are forfeited if a named executive resigns or is terminated for cause. |
| · | | Vision 2020 LTI Awards. As of December 31, 2018, Mr. Fishman was the only named executive who held unvested Vision 2020 LTI awards. In general, unvested Vision 2020 LTI Awards will vest pro rata if employment ends because of death, disability or company termination without cause, based upon the length of service during the applicable vesting period. Any portion of the unvested RSUs that does not vest will be forfeited. All unvested Vision 2020 LTI Awards are forfeited if a named executive resigns or is terminated for cause. |
Vision 2020 LTI Awards.In general, unvested Vision 2020 LTI Awards held by our named executives will vest pro rata if employment ends because of death, disability or company termination without cause, based upon the length of service during the applicable vesting period. Any portion of the unvested RSUs that does not vest will be forfeited. All unvested Vision 2020 LTI Awards are forfeited if a named executive resigns or is terminated for cause. In addition to the provisions listed above, Mr. Nuti’s award agreement provides for pro rata vesting upon death or
| · | | Time-Based Restricted Stock Units. Unvested time-based RSUs held by our named executives generally vest pro rata if employment ends because of death, disability, retirement or Company termination without cause. The pro rata portion is determined based on the length of service during the applicable vesting period. All unvested time-based RSUs are immediately forfeited if a named executive resigns or is terminated for cause. |
| · | | Stock Options.Unvested options generally vest pro rata and become exercisable if employment ends because of death, disability, retirement or Company termination without cause. The pro rata portion is determined based on the length of service during the applicable vesting period. Vested options may be exercised until the earlier of the first anniversary of the termination event, or the expiration date. All unvested options are forfeited if a |
| | disability, and upon approved resignationnamed executive resigns or company termination withoutis terminated for cause.
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Time-Based Restricted Stock Units.Unvested time-based RSUs held by our named executives generally vest pro rata if employment ends because of death, disability, retirement or Company termination without cause. The pro rata portions are determined based on the length of service during the applicable vesting period. All unvested time-based RSUs are immediately forfeited if a named executive resigns or is terminated for cause.
Stock Options.In general, any unvested options held by our named executives vest and become exercisable if employment ends because of death or long-term disability. These options remain exercisable for specified periods tied to age at termination. Unvested options are forfeited if employment ends because of executive retirement or resignation, or Company termination without cause. All unexercised options, whether vested or unvested, are forfeited if employment terminates for cause.
In addition, all unvested equity awards are forfeited and deemed canceled, and the fair market value of previously vested awards is subject to a repayment obligation, if during employment or the twelve monthsyear after employment a named executive competes with the Company, induces or attempts to induce any of our employees to resign or solicits business from customers all as set forth more specifically in applicable equity award agreements. Equity awards are also forfeited if a named executive fails to keep the terms of the award agreement confidential, or engages, as determined by the Committee, in misconduct in connection with employment. | | Treatment of Economic Profit Plan Bonus Bank (Mr. Nuti and Mr. Fishman only) |
Pursuant to the EPP terms in effect on December 31, 2018: | · | | Resignation or Termination for Cause. A named executive’s resignation or termination for cause results in immediate forfeiture of the entire Bonus Bank. |
| · | | Termination Without Cause, Resignation for Good Reason or Retirement.In the event of a qualifying termination of employment without “cause” or for “good reason” or retirement, the named executive will be paid an amount equal to 67% of his or her grandfathered Bonus Bank balance accrued as of December 31, 2014, in four equal installments on each of the first fouratsix-month anniversaries ofintervals after employment termination.ends. |
However, if the relevant Cash Flow Test is not met for the year immediately preceding the year in which any such termination occurs, the first installment payment will be delayed and will continue to be held in the named executive’s Bonus Bank, without interest, until the second installment payment is due, at which time the first and second installment payments will be paid. In addition: (i) if employment termination occurs before August 1 of a particular year, the amount otherwise payable on August 1 of the termination year is payable (but such payment will offset the grandfathered Bonus Bankdollar-for-dollar), and (ii) if it exceeds the amount payable from the grandfathered Bonus Bank (as offset), the executive will receive a prorated payment of the remaining Bonus Bank (based on days employed during the year), multiplied by 33%, payable on August 1 of the year following the termination year (subject to the Cash Flow Test described above). | · | | Termination Due to Death or Disability. Upon a termination by reason of |
| | death or disability, the named executive will be paid his or her entireany grandfathered Bonus Bank Balance in four equal installments atsix-month intervals after employment ends, and the remaining Bonus Bank Balance in a lump sum as soon as reasonably practicable following the end of the calendar quarter in which the named executive’s death or disability occurs, without regard to the Cash Flow Test limitation. |
On February 27, 2019, the Committee terminated the EPP. For details about final EPP Bonus Bank distributions following such termination, see the2018 Long-Term Incentives section above. | | Medical BenefitsFormer Executive Retirement Agreement
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An AgreementMr. Nuti: Mr. Nuti retired from employment and was appointed to the honorary position of Chairman Emeritus of our Board and began consultant services effective April 30, 2018. His retirement agreement referenced his departure due to disability, confirmed application of restrictive covenants and included a general release. In determining to approve Mr. Nuti’s retirement agreement, the Committee took into consideration the circumstances of Mr. Nuti’s departure, his past strong performance as NCR’s CEO for 13 years, a report prepared by the Committee’s independent compensation consultant on treatment of equity upon retirement at our peers and other public companies, NCR’s prior achievement of the applicable performance criteria pertaining to Mr. Nuti’s equity awards, and his efforts to support
an effective transition in leadership for NCR’s stockholders, employees, and customers. Under the retirement agreement, Mr. Nuti’s 2018 equity awards were forfeited upon his retirement and he received no additional severance. Mr. Nuti’s retirement agreement also includes terms reflecting a Committee approved modification to hispre-2018 outstanding equity awards to provide for full continued vesting beyond thepro-rata disability vesting contemplated by the award agreements. All applicable performance goals pertaining to each amended award had already been achieved as of December 31, 2017. This modification resulted in anon-cash accounting charge of $8.2 million, pertaining to awards that were previously disclosed in the Summary Compensation Table in prior proxy statements (i.e., not new awards nor severance). All other outstanding and/or unpaid amounts were settled upon termination in accordance with the prior award agreements and applicable benefit plan terms, including payout of his EPP Bonus Bank balance ($3,518,132) in installments over 2018-2020 in accordance with EPP disability terms, and exercise of previously vested equity awards (in accordance with their terms as provided for in the case of a disability termination). EPP payouts will be made in accordance with Mr. Nuti provides forNuti’s retirement agreement notwithstanding the committee’s termination of the EPP on February 27, 2019. The retirement agreement further affirmed Mr. Nuti’s rights to vested welfare and pension plan benefits, including previously agreed medical benefit coverage under a prior medical benefits agreement with Mr. Nuti. The amount of $214,948 represents the estimated present value of the current accrued benefit, as provided under this Medical Benefits Agreement, of continued participation in certain of the Company’s medical benefit plans at such time in the future as he ceases to be employed by the Company.plans. This estimated value is based on Company COBRA rates, assumed premiums and usage, assumed demographic adjustments and/or other relevant factors. For more details onabout this Agreement,medical benefit, see theAgreements with Our CEONamed Executives section startingand Exhibit 10.5 to our Quarterly Report on page 71.Form10-Q | Mr. Bayer’s Separation Payments
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Effective September 29, 2017, we entered into for the period ended March 31, 2015. Mr. Nuti also agreed to provide consulting services to NCR on a Separation Agreement and General Release under which Mr. Bayer separated from service with the Company. In exchange for Mr. Bayer’s entry into the agreement, which includes a customary release of claims, the Company provided him with the following separation benefits: (a) aone-time lump sum cash severance payment of $1.8 million, (b) an Economic Profit Plan (EPP) payment totaling $593,526 and payable in four equal installments on March 1 and September 1 of 2018 and 2019 (subject to satisfaction of the EPP Cash Flow test described in theEconomic Profit Plan Awards Before 2017 section above), (c) Company-paid COBRA premiumslimited basis for up to 18 monthstwo years, with a $150,000 fee during the first year of health, dentalhistwo-year consulting agreement, and vision coverage, and (d) outplacement assistance.
This Separation Agreement also includesnon-competition,non-solicitation,non-recruitment andnon-disparagement covenants applicable through September 29, 2018. Ina $100,000 fee during the event of a covenant violation, Mr. Bayer will be obligated to reimburse the full amount of any such payments and benefits, and any unpaid EPP and other benefit amounts will be forfeited.
In addition, pursuant to the terms of his outstanding equity awards, Mr. Bayer vested in apro-rata portion of his time-based, performance-based and performance-vesting RSUs (with proration based on Company service through his separation date). This resulted in vesting of 17,283 RSUs, and forfeiture of 125,871 RSUs, in each case on his separation date.
Mr. Bayer will continue to vest in apro-rata portion of his performance-based RSUs based on actual performance over the applicable performance periods to the extent provided in his award agreements as described in the footnotes to theOutstanding Equity Awards at FiscalYear-End 2017 Table and theSummary Compensation Table.second year.
| Potential Payments Upon Termination or Change in Control Table |
This Table shows the estimated amounts each named executive would have received upon the occurrence of the events listed in the table as of December 31, 2017:2018, except that the actual amounts for Mr. Nuti (who retired in early 2018) are described in theFormer Executive Retirement Agreement section above. Mr. Fishman became ineligible for benefits under our Change in Control Severance Plan when he became our Senior Advisor in August 2018. | Potential Payments Upon Termination or Change in Control ($) | Potential Payments Upon Termination or Change in Control ($) | | Potential Payments Upon Termination or Change in Control ($) | | Named Executive | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | William Nuti | | | | | | | | | | | | Michael Hayford | | | | | | | | | | | | Cash Severance | | | 7,500,000 | | | | 3,750,000 | | | | — | | | | — | | | | — | | | | 7,500,000 | | | | 3,750,000 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | 1,500,000 | | | | — | | | | — | | | | — | | | | — | | | | 1,010,959 | | | | — | | | | 1,010,959 | | | | — | | | | — | | Restricted Stock Units(4),(5),(6) | | | 42,354,123 | | | | 20,467,657 | | | | 18,303,616 | | | | — | | | | — | | | Equity Awards(4),(5),(6) | | | | 3,704,663 | | | | 3,704,663 | | | | 828,140 | | | | — | | | | — | | Welfare Benefits(7) | | | 290,017 | | | | 253,083 | | | | 219,246 | | | | — | | | | — | | | | 71,569 | | | | 35,707 | | | | — | | | | — | | | | — | | Economic Profit Plan(8) | | | 3,518,132 | | | | 2,357,148 | | | | 3,518,132 | | | | — | | | | — | | | Excise TaxGross-Up(9),(10) | | | — | | | | — | | | | — | | | | — | | | | — | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination | | 55,172,272 | | | 26,837,888 | | | 22,040,994 | | | | | | | | 12,297,191 | | | | 7,500,370 | | | | 1,839,099 | | | | | |
| Named Executive | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | Robert Fishman | | | | | | | | | | | | Frank Martire | | | | | | | | | | | | Cash Severance | | | 2,625,000 | | | | 1,312,500 | | | | — | | | | — | | | | — | | | | 5,625,000 | | | | 2,812,500 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | 687,500 | | | | — | | | | — | | | | — | | | | — | | | | 662,671 | | | | — | | | | 662,671 | | | | — | | | | — | | Restricted Stock Units(4),(5),(6) | | | 11,054,636 | | | | 4,972,737 | | | | 4,448,849 | | | | — | | | | — | | | Equity Awards(4),(5),(6) | | | | 1,723,522 | | | | 1,723,522 | | | | 336,526 | | | | — | | | | — | | Welfare Benefits | | | 47,095 | | | | 34,354 | | | | — | | | | — | | | | — | | | | 155 | | | | — | | | | — | | | | — | | | | — | | Economic Profit Plan(8) | | | 975,641 | | | | 653,679 | | | | 975,641 | | | | — | | | | — | | | Excise TaxGross-Up(9) | | | — | | | | — | | | | — | | | | — | | | | — | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination | | 15,399,872 | | | 6,983,270 | | | 5,424,490 | | | | — | | | | — | | | | 8,021,348 | | | | 4,546,022 | | | | 999,197 | | | | — | | | | — | |
| Named Executive | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | Mark Benjamin | | | | | | | | | | | | Owen Sullivan | | | | | | | | | | | | Cash Severance | | | 5,062,500 | | | | 2,531,250 | | | | — | | | | — | | | | — | | | | 5,437,500 | | | | 2,718,750 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | 937,500 | | | | — | | | | — | | | | — | | | | — | | | | 482,671 | | | | — | | | | 482,671 | | | | — | | | | — | | Restricted Stock Units(4),(5),(6) | | | 6,830,053 | | | | 6,830,053 | | | | 1,324,216 | | | | — | | | | — | | | Equity Awards(4),(5),(6) | | | | 1,909,893 | | | | 1,909,893 | | | | 266,619 | | | | — | | | | — | | Welfare Benefits | | | 71,029 | | | | 34,354 | | | | — | | | | — | | | | — | | | | 51,738 | | | | 24,747 | | | | — | | | | — | | | | — | | Economic Profit Plan(8) | | | — | | | | — | | | | — | | | | — | | | | — | | | Excise TaxGross-Up(9) | | | — | | | | — | | | | — | | | | — | | | | — | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination | | 12,911,082 | | | 9,405,657 | | | 1,324,216 | | | | — | | | | — | | | | 7,891,802 | | | | 4,663,390 | | | | 749,290 | | | | — | | | | — | |
| Named Executive | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | Paul Langenbahn | | | | | | | | | | | | Andre Fernandez | | | | | | | | | | | | Cash Severance | | | 2,520,000 | | | | 1,260,000 | | | | — | | | | — | | | | — | | | | 4,218,750 | | | | 2,109,375 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | 660,000 | | | | — | | | | — | | | | — | | | | — | | | | 267,551 | | | | — | | | | 267,551 | | | | — | | | | — | | Restricted Stock Units(4), (5), (6) | | | 7,539,900 | | | | 3,317,969 | | | | 2,976,710 | | | | — | | | | — | | | Equity Awards(4), (5), (6) | | | | 2,437,179 | | | | 2,437,179 | | | | 271,282 | | | | — | | | | — | | Welfare Benefits | | | 41,642 | | | | 30,496 | | | | — | | | | — | | | | — | | | | 73,349 | | | | 35,707 | | | | — | | | | — | | | | — | | Economic Profit Plan(8) | | | 327,087 | | | | 219,148 | | | | 327,087 | | | | — | | | | — | | | Excise TaxGross-Up(9) | | | — | | | | — | | | | — | | | | — | | | | — | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination | | 11,098,629 | | | 4,837,613 | | | 3,303,797 | | | | — | | | | — | | | | 7,006,829 | | | | 4,592,261 | | | | 538,833 | | | | — | | | | — | |
| Named Executive | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | | Termination Upon Change in Control(1) | | Involuntary Termination Without Cause(2) | | Death or Disability | | Retirement | | Voluntary Resignation or Termination for Cause | | Robert Ciminera | | | | | | | | | | | | Daniel Campbell | | | | | | | | | | | | Cash Severance | | | 2,100,000 | | | | 1,050,000 | | | | — | | | | — | | | | — | | | | 2,415,000 | | | | 1,207,500 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | 550,000 | | | | — | | | | — | | | | — | | | | — | | | | 632,500 | | | | — | | | | — | | | | — | | | | — | | Restricted Stock Units(4), (5), (6) | | | 5,529,969 | | | | 2,498,877 | | | | 2,241,199 | | | | — | | | | — | | | Equity Awards(4), (5), (6) | | | | 3,195,333 | | | | 2,366,577 | | | | 852,822 | | | | — | | | | — | | Welfare Benefits | | | 32,633 | | | | 23,809 | | | | — | | | | — | | | | — | | | | 48,796 | | | | 35,707 | | | | — | | | | — | | | | — | | Economic Profit Plan(8) | | | 299,829 | | | | 200,885 | | | | 299,829 | | | | — | | | | — | | | Excise TaxGross-Up(9) | | | — | | | | — | | | | — | | | | — | | | | — | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination | | 8,522,431 | | | 3,783,571 | | | 2,541,028 | | | | — | | | | — | | | | 6,301,629 | | | | 3,619,784 | | | | 852,822 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | Named Executive | | Termination Upon Change in Control(1) | | | Involuntary Termination Without Cause(2) | | | Death or Disability | | | Retirement | | | Voluntary Resignation or Termination for Cause | | Robert Fishman | | | | | | | | | | | | | | | | | | | | | Cash Severance | | | 1,312,500 | | | | 1,312,500 | | | | — | | | | — | | | | — | | Pro rata Bonus(3) | | | — | | | | — | | | | — | | | | — | | | | — | | Equity Awards(4), (5), (6) | | | 6,996,749 | | | | 4,280,117 | | | | 4,280,117 | | | | — | | | | — | | Welfare Benefits | | | 35,707 | | | | 35,707 | | | | — | | | | — | | | | — | | Economic Profit Plan(7) | | | 653,679 | | | | 360,242 | | | | 653,679 | | | | | | | | | | Outplacement | | | 10,000 | | | | 10,000 | | | | — | | | | — | | | | — | | Total Benefits Payable upon Termination(8) | | | 9,008,635 | | | | 5,998,566 | | | | 4,933,796 | | | | — | | | | — | |
(1) This column shows payments based on occurrence of a “double trigger” event occurring (a qualifying change in control and a qualifying termination), together with assumption of applicable equity awards in the change in control and vesting based on actual performance. For annual performance-based RSU awards, this column reflects that performance was achieved at 114.5% for the 2015 awards, 148.2% for the 2016 awards, 0% for the 2017 awards, and 0% for the 20172018 awards. For Vision 2020 Awards, and the 2017 and 2018 performance-vesting RSU awards, performance is reflected at 100%. (2) For Mr. Nuti and Mr. Benjamin,This column shows the amount in this column equals the amount theyexecutive would receive upon a termination without cause or for good reason under the terms of their agreements described in theAgreements with our Named Executives section starting on page 71. For our other named executives, the amount in this column equals the amount they would receive upon an involuntary termination without cause under the terms of our Executive Severance Plan.Plan and an applicable agreement with the Company. (3) This row shows payments based on the MIP 20172018 target bonus in the event of a Termination Upon Change in Control and actual 20172018 bonus for other termination scenarios. No actual bonus was earned or paid based on performance under the MIP for 2017.2018. For Messrs. Hayford, Martire, Sullivan, and Fernandez, this row shows prorated 2018 MIP target bonus (proration based on 2018 service) payable under their negotiated new hire employment agreements. (4) Equity valuations reflect a closing price of NCR common stock on December 29, 201731, 2018 of $33.99.$23.08. (5) The payments in this row include only unvested awards for which payment would accelerate in connection with the applicable termination scenario. (6) The payments in this row reflect accelerated vesting of any applicable performance-based RSU awards, based on actual performance in the Termination Upon Change in Control, Involuntary Termination Without Cause, and Death or Disability scenarios; performanceperformance. Performance was achieved at 114.5% for 2015 awards, 148.2% for 2016 awards, and 0% for the 2017 and 2018 performance-based RSU awards, and performanceawards. Performance was achieved at 100% for Vision 2020 Awards and 2017 and 2018 performance-vesting RSU awards. (7) Includes $219,246 representing the estimated present value of the current accrued benefit, as provided under an Agreement with Mr. Nuti, of continued participation in certain of the Company’s medical benefit plans at such time in the future as he ceases to be employed by the Company. This estimated value is based on Company COBRA rates, assumed premiums and usage, assumed demographic adjustments and/or other relevant factors. For more details about this benefit, see Exhibit 10.5 to our Quarterly Report on Form10-Q for the period ended March 31, 2015. (8) For payout of the Bonus Bank, this row shows a 67% payout upon involuntary termination without cause, and a 100% payout in the event of death or disability and Termination Upon Change in Control.Control, and upon involuntary termination without cause a 33% payment of his outstanding Bonus Bank balance in August 2019 plus a payout of 33% of the amount remaining based on service through 12/31/18. On February 27, 2019, the Committee terminated the EPP. For details about final EPP Bonus Bank distributions following such termination, see the2018 Long-Term Incentives section above.
(9) Under our(8) Amounts shown in the Termination Upon Change in Control column presume an involuntary termination without cause, with cash severance, welfare benefits and outplacement provided under the Executive Severance Plan, the excise taxgross-up does not apply to any participant who enters the plan after January 27, 2010.
(10) Discount rates to determine the present values of the accelerated benefit of restricted shares for the parachute calculation were: (i) Short-Term – 1.81%, (ii)Mid-Term – 2.52%, and (iii) Long-Term – 3.14%.Plan.
| Equity Compensation Plan Information Table |
This Table shows details about awards outstanding and shares available for issuance as of December 31, 20172018 under our Management Stock Plan that was in effect through April 25, 2006, our NCR Corporation 2011 Amended and Restated Stock Incentive Plan that was in effect through April 24, 2013 (“2011 Stock Incentive Plan”), our NCR Corporation 2013 Stock Incentive Plan that was in effect through April 30, 2017 (“2013 Stock Plan”), and our NCR Corporation 2017 Stock Incentive Plan which is our most recently adopted equity compensation plan (referred to below as our “2017 Stock Plan”): | Equity Compensation Plan Information – 2017 | | | Equity Compensation Plan Information – 2018 | | Equity Compensation Plan Information – 2018 | Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted average exercise price of outstanding options, warrants and rights(1) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities shown in column a) | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | Weighted average exercise price of outstanding options, warrants and rights(1) | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities shown in column a) | Equity compensation plans approved by stockholders: | | | (a) | | | | (b) | | | | (c) | | | | | (a) | | | | | (b) | | | | | (c) | | Management Stock Plan(2) | | | 46,061 | (3) | | | — | | | | — | | | | | 28,415 | (3) | | | | — | | | | | — | | 2011 Stock Plan(4) | | | 614,152 | (5) | | $ | 16.70 | | | | — | | | | | 275,889 | (5) | | | $ | 15.22 | | | | | — | | 2013 Stock Plan(6) | | | 8,127,418 | (7) | | | — | | | | — | | | | | 2,824,854 | (7) | | | | — | | | | | — | | 2017 Stock Plan(8) | | | 169,851 | (9) | | | — | | | | 15,692,245 | | | | | 6,424,398 | (9) | | | | $30.22 | | | | | 12,886,347 | | Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | | | | | — | | | | | — | | | | | — | | Total | | | 8,957,482 | | | $ | 16.70 | | | | 15,692,245 | | | | | 9,553,556 | | | | $ | 29.08 | | | | | 12,886,347 | |
(1) The weighted average exercise price does not take into account outstanding time-based, performance-based and performance-vesting restricted stock unit awards. (2) We adopted the NCR Management Stock Plan with stockholder approval effective January 1, 1997. We terminated the NCR Management Stock Plan as of April 26, 2006, upon stockholder approval of the 2006 Stock Incentive Plan, which we subsequently amended and restated as the 2011 Stock Incentive Plan. However, termination of the NCR Management Stock Plan did not affect awards previously granted and outstanding under its terms. (3) Outstanding awards consist of 46,06128,415 restricted stock unit awards. (4) We adopted the 2006 Stock Incentive Plan with stockholder approval effective April 26, 2006. On April 27, 2011, we amended and restated the 2006 Stock Plan as the 2011 Stock Plan. We froze the 2011 Stock Plan effective April 24, 2013, when stockholders approved our 2013 Stock Plan. Previously granted 2011 Stock Plan Awards remain outstanding under their terms. (5) Outstanding awards consist of 474,948197,034 nonqualified stock options and 139,20478,855 restricted stock unit awards. (6) Stockholders approved our 2013 Stock Plan on April 24, 2013. We froze the 2013 Stock Plan on May 1, 2017, when our 2017 Stock Plan became effective. Previously granted 2013 Stock Plan awards remain outstanding under their terms. (7) Outstanding awards consist of 7,153,5082,824,854 restricted stock unit awards including performance-vesting restricted stock unit awards payable at 100%, and additional shares that would be issued if outstanding performance-based restricted stock unit awards earned the maximum payout possible under their terms. (8) Stockholders approved our 2017 Stock Plan on April 26, 2017, and it became effective on May 1, 2017. (9) Outstanding awards consist of time-based2,408,596 nonqualified stock options, and 3,282,407 restricted stock unit awards.awards including restricted stock unit awards payable at 100%, and an additional 733,395 shares that would be issued if outstanding performance-based restricted stock unit awards earned the maximum payout possible under their terms. Rules adopted under the Dodd-Frank Wall Street Reform and Consumer Protection Act require us to disclose the ratio of our CEO’s annual total compensation to the annual total compensation of the “median compensated” employee of all our employees other than the CEO (the “Median Compensated Employee”) other than the CEO.. The 20172018 annual total compensation of the Median Compensated Employee was $61,705. Mr. Hayford’s (our President and CEO as of October 2, 2017 other than our CEO, Mr. Nuti, was $58,506. Mr. Nuti’s 2017April 30, 2018) annualized 2018 annual total compensation as reported in theSummary Compensation Table on page 69, was $12,435,018.$14,605,382. The ratio of these amounts was 1:213.237. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll records and the methodology described below. Because SEC rules for identifying the Median Compensated Employee and calculating the pay ratio based on his or her annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. As permitted under SEC rules, given that there have been no changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our pay ratio disclosure we have used the same Median Compensated Employee that we identified last year in calculating our 2018 CEO pay ratio. To identify this Median Compensated Employee last year, we used Target Total Cash, which includes base salary or base wages, target cash bonus incentives and other cash-based incentive allowances, such as housing, automobile, meal and other types of allowances, as reported in our payroll data, to determine our Median Compensated Employee.Employee as of October 2, 2017. For hourly employees, we calculated base wages based on a reasonable estimate of hours worked during 2017 and the relevant employee’s hourly wage rate as in effect on October 2, 2017. For salaried employees, we calculated base salary using the relevant employee’s annual salary level as in effect on October 2, 2017. We annualized Target Total Cash for all permanent employees who did not work for all of 2017. As of October 2, 2017, NCR employed approximately 9,443 US employees and 20,419non-US employees. In determining the Median Compensated Employee, we prepared a listing of approximately 9,442 of ourUS-based employees and approximately 19,011 of ournon-US based employees who were employed as of October 2, 2017. This listing excluded our then-current CEO and approximately 34 employees from Bosnia & Herzegovina, 1 employee from Brunei, 13 employees from the Dominican Republic, 140 employees from Egypt, 30 employees from Ghana, 1 employee from Luxembourg, 121 employees from Nigeria, 92 employees from Pakistan, and 976 employees from the Philippines. The excludednon-US employees, in the aggregate, representrepresented less than 5% of our total employee population. In determining that there had been no changes to our employee population that were reasonably likely to result in a significant change to our pay ratio disclosure for 2018, we considered that this October 2, 2017 employee population also excludes approximately 433 employees that we acquired in connection with 2018 acquisitions. We then identified the Median Compensated Employee from thatthe list, who was an employee from Chile. Because the median employee we initially identified had anomalous compensation characteristics, we substituted the identified Median Compensated Employee with a US employee with substantially similar compensation, based on the compensation measure used to select the Median Compensated Employee and determined this individual’s 2018 compensation in accordance with the requirements of RegulationS-K, Item 402(c)(2)(x). | Related Person Transactions |
Under its charter, the Committee on Directors and Governance (CODG)CODG is responsible for the review of all related person transactions. In January 2007 the Board formalized in writing a Related Person Transactions Policy that provides that each related person transaction must be considered for approval or ratification (i) by the Company’s CODG, or (ii) by all of the disinterested members of the Board, if the CODG so determines. The policy requires each director and executive officer of the Company to use reasonable efforts to report to the Company’s General Counsel any transaction that could constitute a related person transaction prior to undertaking the transaction. The General Counsel must advise the Chairman of the CODG of any related person transaction of which the General Counsel becomes aware, whether as a result of reporting or otherwise. The CODG then considers each such related person transaction, unless the Committee determines that the approval or ratification of such transaction should be considered by all of the disinterested members of the Board, in which case such disinterested members of the Board will consider the transaction. Except as set forth below, the Company will not enter into a related person transaction that is not approved in advance unless the effectiveness of the transaction is expressly subject to ratification by the CODG or the disinterested members of the Board, as applicable. If the Company enters into a transaction that it subsequently determines is a related person transaction or a transaction that was not a related person transaction at the time it was entered into but thereafter became a related person transaction, then, in either case, the related person transaction shall be presented to the CODG or the disinterested members of the Board, as applicable, for ratification. If such related person transaction is not ratified, then the Company shall take all reasonable actions to attempt to terminate the Company’s participation in that transaction. Under the policy, a related person transaction generally means any transaction involving or potentially involving an amount in excess of $120,000 in which the Company or any of its subsidiaries is a participant and in which any of its directors or director nominees, executive officers or 5% stockholders, or any immediate family members of any of the foregoing, or any entity controlled by any of the foregoing or in which any of the foregoing has a 10% or greater ownership interest, has or will have a direct or indirect material interest. In considering whether to approve or ratify a related person transaction or relationship, the CODG or the disinterested members of the Board, as applicable, considers all relevant factors, including: the size of the transaction and the amount payable to a related person or any other benefit received by a related person;
| · | | the size of the transaction and the amount payable to a related person or any other benefit received by a related person; |
the nature of the interest of the related person in the transaction;
| · | | the nature of the interest of the related person in the transaction; |
whether the transaction may involve a conflict of interest; and
| · | | whether the transaction may involve a conflict of interest; and |
whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties.
| · | | whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. |
Transactions and relationships that are required to be disclosed under applicable securities laws and regulations are disclosed in the Company’s proxy statement. Since the beginning of the Company’s 20172018 fiscal year, the CODG has identified the following related person transactions requiring such disclosure: In December 2015, the Company issued 820,000 shares of Series A Convertible Preferred Stock to entities affiliated with The Blackstone Group L.P. (collectively, “Blackstone”) for an aggregate purchase price of $820 million, or $1,000 per share, pursuant to the Investment Agreement. Holders of Series A Convertible Preferred Stock are entitled to a cumulative dividend at the rate of 5.5% per annum, payable quarterly in arrears. If the Company does not declare and pay that dividend, the dividend rate will increase by 2.5% to 8.0% per annum until all accrued but unpaid dividends have been paid in full. Dividends are paidin-kind, through the issuance of additional shares of Series A Convertible Preferred Stock, for the first sixteen dividend payment dates, after which dividends are payable in cash orin-kind (or a combination of both) at the option of the Company. Blackstone was granted certain customary registration rights with respect to the Series A Convertible Preferred Stock and the common stock issuable upon conversion thereof under the terms of a registration rights agreement between Blackstone and the Company. Pursuant to these rights, on March 29, 2016, the Company filed a Registration Statement on FormS-3 with the Securities and Exchange Commission to register for resale an aggregate of (i) 1,021,314 shares of Series A Convertible Preferred Stock, consisting of the 820,000 shares of Series A Convertible Preferred Stock issued to Blackstone in December 2015, and 201,314 shares of Series A Convertible Preferred Stock to be issued as dividends paidin-kind on such shares over a four-year period beginning in December 2015; and (ii) 34,043,460 shares of the Company’s common stock, which represents the total number of shares of common stock issuable upon conversion of all such shares of Series A Convertible Preferred Stock. Under the registration statement, Blackstone may offer and sell shares of Series A Convertible Preferred Stock or shares of common stock in public or private transactions, or both. These sales may occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices. Under the original terms of the Investment Agreement, Blackstone agreed not to sell or otherwise transfer its shares of Series A Convertible Preferred Stock (or any shares of common stock issued upon conversion thereof) without the Company’s consent until June 4, 2017. In March 2017, the Company agreed to provide Blackstone with an early partial release from thislock-up, allowing Blackstone to sell approximately 49% of its shares of Series A Convertible Preferred Stock, which in the aggregate represented approximately 14,400,000 shares of common stock on anas-converted basis. In return, Blackstone agreed to amend the Investment Agreement to extend thelock-up on the remaining 51% of its shares of Series A Convertible Preferred Stock for six months until December 1, 2017. In connection with the early release of thelock-up, Blackstone offered for sale 342,000 shares of Series A Convertible Preferred Stock in an underwritten offering conducted pursuant to the registration rights described above. In addition, the Company entered into a stock repurchase agreement whereby Blackstone agreed to convert 90,000 shares of Series A Convertible Preferred Stock into approximately 3,000,000 shares of the Company’s common stock and to sell such shares to the Company for $48.47 per share. The underwritten offering and the stock repurchase were consummated on March 17, 2017. In accordance with the registration rights agreement, the Company paid certain expenses incurred by Blackstone in connection with the underwritten offering. Following the sales described above, Blackstone retained its right to designate two seatsnominees for election as a director on the Company’s board of directors. As of the Record Date, taking into account dividends paidin-kind and the transactions described above, Blackstone held 465,537491,666 shares of Series A Preferred Stock, which shares represented approximately 11.57%11.1% of the Company’s common stock on anas-converted basis. Except as set forth above, since the beginning of the Company’s 20172018 fiscal year, the CODG has not identified any related person transactions requiring disclosure. | Fees Paid to Independent Registered Public Accounting Firm |
The following table presents the approximate fees for professional audit services rendered by the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, for the audit of the Company’s financial statements for the fiscal years ended December 31, 20172018 and December 31, 2016,2017, as well as the approximate worldwide fees billed for other services rendered by PricewaterhouseCoopers in such years: | Service | | 2017 | | | 2016 | | | 2018 | | | 2017 | | Audit Fees(1) | | $ | 6,162,400 | | | $ | 6,051,100 | | | $ | 5,570,300 | | | $ | 6,162,400 | | Audit-Related Fees(2) | | $ | 503,000 | | | $ | 367,000 | | | $ | 962,300 | | | $ | $503,000 | | Subtotal | | $ | 6,665,400 | | | $ | 6,418,100 | | | $ | 6,532,600 | | | $ | 6,665,400 | | Tax Fees(3) | | $ | 233,000 | | | $ | 360,000 | | | $ | 1,029,000 | | | $ | 233,000 | | All Other Fees(4) | | $ | 482,800 | | | $ | 3,068,800 | | | $ | 8,800 | | | $ | 482,800 | | Subtotal | | $ | 715,800 | | | $ | 3,428,800 | | | $ | 1,037,800 | | | $ | 715,800 | | Total Fees | | $ | 7,381,200 | | | $ | 9,846,900 | | | $ | 7,570,400 | | | $ | 7,381,200 | |
(1) Includes fees required for the review and examination of NCR’s consolidated financial statements, the audit of internal controls over financial reporting, quarterly reviews of interim financial statements, statutory audit and consultations by management as to the accounting or disclosure treatment of transactions or events and the actual or potential impact of final or proposed rules, standards or interpretations by regulatory and standard-setting bodies. AlsoThis also includes attestation services and review services associated with the Company’s filings with the SEC. (2) Includes fees related to financial audits of employee benefit plans and services related to due diligence and technical accounting assistance. (3) Generally includes tax compliance, tax advice, tax planning and expatriate services. In 20172018 and 2016,2017, respectively, fees for tax services include: (a) $167,000$384,000 and $96,000$167,000 for tax compliance including the preparation, review and filing of tax returns; and (b) $66,000$645,000 and $264,000$66,000 for tax audit consultation and assistance. (4) Includes fees for all other work performed by PricewaterhouseCoopers that does not meet the above category descriptions. In 2018, of these fees 83% related to licenses to research and benchmarking applications and 17% related to inventory certification assistance. In 2017, of these fees, approximately 92% related to advisory services associated with integrated business planning related to assessment of the Company’s supply chain operations, and 8% related to licenses to research and benchmarking applications. In 2016, of these fees, approximately 67% related to advisory services associated with organizational design related to integrated solutions and product lifecycle management, approximately 31% related to advisory services associated with integrated business planning related to assessment of the Company’s supply chain operations, and approximately 2% related to security advisory services. These items were evaluated by the Audit Committee to be permissible services and determined not to impact the independence and objectivity of the independent registered public accounting firm. The charter of the Audit Committee requires that all auditing andnon-auditing services to be provided to the Company by its independent accountants bepre-approved by the Audit Committee. The Audit Committee has adopted policies and procedures regarding itspre-approval of these services (the“Pre-Approval Policy”). ThePre-Approval Policy is designed to assure that the provision of such services does not impair the independence of the Company’s independent registered public accounting firm and includes the following principles and restrictions, among others: In no case should NCR or its consolidated subsidiaries retain the Company’s independent registered public accounting firm or its affiliates to provide management consulting services or anynon-audit services that are not permitted under applicable laws and regulations, including, without limitation, the Sarbanes-Oxley Act of 2002 and the SEC’s related rules and regulations.
| · | | In no case should NCR or its consolidated subsidiaries retain the Company’s independent registered public accounting firm or its affiliates to provide management consulting services or anynon-audit services that are not permitted under applicable laws and regulations, including, without limitation, the Sarbanes-Oxley Act of 2002 and the SEC’s related rules and regulations. |
Unless a type of service to be provided by the independent registered public accounting firm has received generalpre-approval, it will require specificpre-approval by the Audit Committee. Any othernon-audit services and tax consulting services will require specificpre-approval by the Audit Committee and a determination that such services would not impair the independence of the Company’s independent registered public accounting firm. Specificpre-approval by the Audit Committee will also be required for any material changes or additions to thepre-approved services.
| · | | Unless a type of service to be provided by the independent registered public accounting firm has received generalpre-approval, it will require specificpre-approval by the Audit Committee. Any othernon-audit services and tax consulting services will require specificpre-approval by the Audit Committee and a determination that such services would not impair the independence of the Company’s independent registered public accounting firm. Specificpre-approval by the Audit Committee will also be required for any material changes or additions to thepre-approved services. |
The Audit Committee recommends that the ratio of total fees for tax and all othernon-audit services to total fees for audit and audit-related services procured by the Company in a fiscal year be less than 1 to 1.
| · | | The Audit Committee recommends that the ratio of total fees for tax and all othernon-audit services to total fees for audit and audit-related services procured by the Company in a fiscal year be less than 1 to 1. |
The Audit Committee will not permit the exclusive retention of NCR’s independent registered public accounting firm in connection with a transaction initially recommended by the independent auditors if the purpose may be tax avoidance and the proposed tax treatment is not supported in applicable tax law.
| · | | The Audit Committee will not permit the exclusive retention of NCR’s independent registered public accounting firm in connection with a transaction initially recommended by the independent auditors if the purpose may be tax avoidance and the proposed tax treatment is not supported in applicable tax law. |
Pre-approval fee levels for all services to be provided by the independent registered public accounting firm will be established annually by the Audit Committee and updated on a quarterly basis by the Audit Committee at its regularly scheduled meetings. Any proposed services significantly exceeding these levels will require separatepre-approval by the Audit Committee.
| · | | Pre-approval fee levels for all services to be provided by the independent registered public accounting firm will be established annually by the Audit Committee and updated on a quarterly basis by the Audit Committee at its regularly scheduled meetings. Any proposed services significantly exceeding these levels will require separatepre-approval by the Audit Committee. |
The Corporate Controller will report to the Audit Committee on a quarterly basis regarding the status of allpre-approved audit, audit-related, tax and all othernon-audit services provided by the Company’s independent registered public accounting firm or its affiliates to NCR or its consolidated subsidiaries.
| · | | The Corporate Controller will report to the Audit Committee on a quarterly basis regarding the status of allpre-approved audit, audit-related, tax and all othernon-audit services provided by the Company’s independent registered public accounting firm or its affiliates to NCR or its consolidated subsidiaries. |
Back-up documentation will be provided to the Audit Committee by management and/or the independent registered public accounting firm when requestingpre-approval of services by the Company’s independent registered public accounting firm. At the request of the Audit Committee, additional detailed documentation regarding the specific services will be provided.
| · | | Back-up documentation will be provided to the Audit Committee by management and/or the independent registered public accounting firm when requestingpre-approval of services by the Company’s independent registered public accounting firm. At the request of the Audit Committee, additional detailed documentation regarding the specific services will be provided. |
Requests or applications to provide services that require separate approval by the Audit Committee will be submitted to the Audit Committee by the Chief Financial Officer or Corporate Controller, with the support of the independent registered public accounting firm, and must include a joint statement as to whether, in the view of management and the independent registered public accounting firm, the request or application is consistent with the SEC’s rules on auditor independence.
| · | | Requests or applications to provide services that require separate approval by the Audit Committee will be submitted to the Audit Committee by the Chief Financial Officer or Corporate Controller, with the support of the independent registered public accounting firm, and must include a joint statement as to whether, in the view of management and the independent registered public accounting firm, the request or application is consistent with the SEC’s rules on auditor independence. |
At the beginning of each fiscal year, management and the Company’s independent registered public accounting firm propose to the Audit Committee the audit andnon-audit services to be provided by the firm during that year. The Audit Committee reviews andpre-approves the proposed services taking into account, among other things, the principles and restrictions set forth in thePre-Approval Policy. Under thePre-Approval Policy, the Audit Committee has delegated to its Chair limited authority to grantpre-approvals for audit, audit-related, tax and othernon-audit services in the event that immediate approval of a service is needed, and the Chair can further delegate such authority to another Audit Committee member. The Chair (or his or her delegate) must report anypre-approval decisions to the Audit Committee at its next scheduled meeting for its review and approval. The Audit Committee may not delegate to management its responsibilities topre-approve services performed by the independent registered public accounting firm. The audit,non-audit, tax and all othernon-audit services provided by PricewaterhouseCoopers to the Company, and the fees charged for such services, are actively monitored by the Audit Committee as set forth in thePre-Approval Policy on a quarterly basis to maintain the appropriate level of objectivity and independence in the firm’s audit work for NCR. Part of the Audit Committee’s ongoing monitoring includes a review of any de minimis exceptions as provided in the applicable SEC rules fornon-audit services that were notpre-approved by the Audit Committee. In 20172018 and 2016,2017, of those total amounts reported above, all activities werepre-approved by the Audit Committee prior to commencement, and therefore no de minimis activity was reported. | Board Audit Committee Report |
The Audit Committee consists of five directors, each of whom is independent as determined by the Board of Directors based on independence standards set forth in the Board’s Corporate Governance Guidelines, which meet, and in some cases exceed, the listing standards of the New York Stock Exchange (“NYSE”) and the applicable rules of the U.S. Securities and Exchange Commission (“SEC”). In accordance with NYSE rules, all members are “financially literate.” In addition, four of its members are “audit committee financial experts” as defined under applicable SEC rules. A brief description of the responsibilities of the Audit Committee is set forth above under the captionCommittees of the Board. The Audit Committee acts under a charter adopted by the Board of Directors, which is periodically reviewed and revised as appropriate. The Audit Committee charter is available on the Company’s website athttps://www.ncr.com/company/corporate-governance/board-of-directors-committee-membership-and-charters. In general, NCR’s management is responsible for the preparation, presentation and integrity of the Company’s financial statements, accounting and financial reporting principles, internal controls, and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”), NCR’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles, as well as an independent audit of the Company’s internal controls over financial reporting. In the course of fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with NCRNCR’s management the Company’s audited financial statements for fiscal year 2017,2018, as well as its quarterly public earnings releases and its quarterly reports on Form10-Q, and, together with the Board, has reviewed and discussed the Company’s Annual Report on Form10-K and this proxy statement. In addition, the Audit Committee discussed with PricewaterhouseCoopers, the Company’s independent registered public accounting firm, the matters required to be discussed by the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standard No. 16 (as codified, AS 1301). The Audit Committee also has received the written disclosures and the letter from PricewaterhouseCoopers required by applicable requirements of the PCAOB’s Rule 3526 and has discussed with PricewaterhouseCoopers its independence, and the Audit Committee concurred, based on those disclosures and discussions as well as its own review and consideration, that PricewaterhouseCoopers is independent. In connection with its discussions concerning the independence of its independent registered public accounting firm, the Audit Committee adopted its annual policy requiring that the Audit Committeepre-approve all audit andnon-audit services provided by the Company’s independent registered public accounting firm or its affiliates to NCR or its consolidated subsidiaries. The Audit Committee also reviewed its procedures for processing and addressing complaints regarding accounting, internal controls, or auditing matters, and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters. Finally, the Audit Committee has reviewed NCR’s critical accounting policies and alternative policies with NCR’s management and the Company’s independent registered public accounting firm to determine that both are in agreement that the policies currently being used are appropriate. The Audit Committee met in executive session at its regular meetings periodically throughout the year with both PricewaterhouseCoopers and the internal auditors. It also met privately on occasion with the Chief Financial Officer, who has unrestricted access to the Audit Committee. Based on the reviews and the discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 20172018 for filing with the SEC. | | | Dated: February 20, 201827, 2019 | | The Audit Committee: Kurt P. Kuehn, Chair Gregory R. Blank Richard L. Clemmer
Robert P. DeRodes Deborah A. Farrington Matthew A. Thompson |
| | Proposal 3 – Ratify the Appointment of Independent
Registered Public Accounting Firm for 20182019 |
| | | FOR | | The Board of Directors recommends that you vote FOR the proposal to ratify the appointment of PricewaterhouseCoopers as our Independent Registered Public Accounting Firm for 2018.2019. |
The Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 20182019 and the Board has approved this selection. Although stockholder ratification of the appointment of the Company’s independent registered public accounting firm is not required, the Board is asking that you ratify this appointment as a matter of good corporate governance. PricewaterhouseCoopers has been the Company’s independent registered public accounting firm since 1993 and is a leader in providing audit services to companies in the high-technology industry. The Board believes that PricewaterhouseCoopers is well qualified to serve as NCR’s independent registered public accounting firm due to its experience, global presence with offices or affiliates in or near most locations where NCR does business and quality audit work in serving the Company. PricewaterhouseCoopers rotates its audit partners assigned to audit NCR at least once every five years and the Audit Committee has placed restrictions on the Company’s ability to hire any employees or former employees of PricewaterhouseCoopers or its affiliates. Based on its“Pre-Approval Policy” as defined on page 9080 of this proxy statement and applicable SEC rules and guidance, the Audit Committee considered whether the provision during 20172018 of the tax and othernon-audit services described above under the caption “Fees Paid to Independent Registered Public Accounting Firm” was compatible with maintaining the independence of PricewaterhouseCoopers and concluded that it was. PricewaterhouseCoopers representatives will be present at the virtual Annual Meeting where they will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions. | How Does the Board Recommend that I Vote on this Proposal? |
The Board of Directors and the Audit Committee recommend that you vote FOR this proposal. Proxies received by the Board will be voted FOR this proposal unless they specify otherwise. If the stockholders do not ratify the appointment of PricewaterhouseCoopers, the Audit Committee will reconsider the appointment, but may elect to maintain it. | | Vote Required for Approval |
The resolution will be approved if it receives the affirmative vote of a majority of the votes cast on the proposal. Abstentions and broker“non-votes”, if any, will not be counted as votes cast and will have no effect on the approval of the resolution. As brokers generally have discretionary authority to vote on this proposal if they do not receive voting instructions, we do not expect any brokernon-votes. The vote is not binding on the Board and Audit Committee but the Board and Audit Committee will review and consider the voting results when evaluating selection of the Company’s independent registered public accounting firm in the future. | | Proposal 4 –Directors’ proposal to amend and restate the charter of the Company to eliminate the supermajority provisions contemplated by the Maryland General Corporation Law and the Company’s charter and make certain conforming changes to the charter |
| | | FOR | | The Board of Directors recommends that you vote FOR the proposal to amend and restate the charter of the Company to eliminate the supermajority provisions contemplated by the Maryland General Corporation Law and the Company’s charter and make certain conforming changes to the charter. |
NCR submits this proposal to amend and restate the charter of NCR (the “Charter”) to (i) eliminate the supermajority voting provisions contemplated thereby for certain matters and require the affirmative vote of a majority of all the votes entitled to be cast to approve such matters, and (ii) make certain changes to the Charter to conform the language more closely to the Maryland General Corporation Law (the “MGCL”). As background, under the MGCL, a Maryland corporation generally is not permitted to dissolve, amend its charter, merge or consolidate with another entity, convert into another form of entity, sell all or substantially all of its assets or engage in a statutory share exchange (commonly referred to as “extraordinary transactions”), unless approved by the affirmative vote of stockholders holding at leasttwo-thirds of all the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these extraordinary transactions by a lesser percentage, but not less than a majority, of all the votes entitled to be cast on the matter. In addition, a corporation may require that other matters, such as the removal or election of directors, or bylaw amendments, may only be undertaken upon a supermajority vote of stockholders. At present, the vote of eighty percent of the voting power of all shares of NCR entitled to vote generally in the election of directors then outstanding, voting together as a single class, is required with respect to ARTICLE VII, Section 7.1(c) (director removal); ARTICLE VII, Section 7.1(d) (director replacement after removal); ARTICLE VIII, Section 8.2 (amendments to certain provisions of the Bylaws of NCR (the “Bylaws”)) and ARTICLE IX, Section 9.1 (amendments to certain provisions of the Charter) of the Charter. While a supermajority vote requirement protects against amendments to key provisions of a charter or bylaws, the removal and subsequent replacement of a director, or the entering into of extraordinary transactions without broad stockholder support, the Board of Directors of NCR (the “Board”) has determined, following its deliberation and consideration regarding the rationale for such provisions in light of current corporate governance standards and practices and as permitted by Maryland law, that requiring only a majority of all the votes entitled to be cast on the matter to amend all provisions of the Charter and to approve the extraordinary transactions noted above is advisable and in the best interests of NCR. Similarly, after deliberation and consideration, the Board has determined, also as permitted by Maryland law, that requiring only a majority of all the votes entitled to be cast on the matter to amend all provisions of the Bylaws, to remove a director, and to replace a director after removal, is advisable and in the best interests of NCR. NCR is also submitting this proposal to amend ARTICLE VI, Section 6.2 of the Charter to provide that, notwithstanding any provision of law requiring any action to be taken or approved by the affirmative vote of stockholders entitled to cast a greater number of votes, and except as may otherwise be specifically provided elsewhere in the Charter or the Bylaws, any such action shall be effective and valid if declared advisable by the Board and taken or approved by the affirmative vote of stockholders entitled to cast a majority of all the votes entitled to be cast on the matter. The requirement that the Board first declare the action advisable contained in the prior sentence is required by the MGCL for approval of charter amendments and the other extraordinary transactions noted above. Accordingly, the Board has unanimously declared such amendments advisable and in the best interest of NCR and has directed that these amendments be submitted to the stockholders of NCR for their consideration. NCR received a stockholder proposal on this issue, which proposed replacing the supermajority provisions in the Charter and the Bylaws with a voting standard requiring only a majority of the votes cast (or the closest standard thereto permitted by law). As noted above, Maryland law does not permit a corporation to engage in an extraordinary transaction or remove a director without first obtaining the affirmative vote of stockholders entitled to cast not less than a majority of all the votes entitled to be cast on the matter. Further, consistent with the practice of a majority of the public corporations incorporated in the State of Maryland that provide stockholders with the concurrent power to amend their bylaws, the amendment provides that stockholders entitled to cast not less than a majority of all the votes entitled to be cast on the matter may amend the Bylaws. The full text of the amendments to the Charter is set forth in the Articles of Amendment and Restatement attached hereto as Exhibit A to this proxy statement. In accordance with the Bylaws, the Board has approved, subject to the approval of this proposal by the stockholders of NCR, amendments to the Bylaws to permit all amendments to the Bylaws by stockholders to be made by a majority of all the votes entitled to be cast on the matter, rather than requiring eighty percent of the votes entitled to be cast. For all other matters on which stockholders vote and unless otherwise required by law, the Charter or the Bylaws, the Bylaws currently provide for a default voting standard of a majority of the votes cast. We believe this proposal strikes the proper balance of protecting against the actions of a few large stockholders while recognizing that broad supermajority provisions are no longer viewed by many parties as consistent with current best practices for corporate governance at U.S. public companies. | How Does the Board Recommend that I Vote on this Proposal? |
The Board of Directors recommends that you vote FOR this proposal. Proxies received by the Board will be voted FOR this proposal unless they specify otherwise. | | Vote Required for Approval |
Pursuant to the Charter, the amendments to the Charter contemplated by the Articles of Amendment and Restatement (other than the amendment to Section 6.2) must be approved by the affirmative vote of holders entitled to cast not less than eighty percent of the voting power of all shares of outstanding stock of NCR entitled to vote generally in the election of directors (currently, the common stock and the Series A Convertible Preferred Stock voting on anas-converted basis, together as a single class). The amendment to Section 6.2 requires the affirmative vote of a majority of the voting power of all shares of outstanding stock of NCR entitled to vote thereon. Abstentions and brokernon-votes will have the effect of votes against the proposed amendments. If this proposal is approved by the affirmative vote of holders representing eighty percent or more of the voting power of all shares of outstanding stock of NCR entitled to vote generally in the election of directors, the Company will cause to be filed with the State Department of Assessments and Taxation of Maryland the Articles of Amendment and Restatement attached as Exhibit A to this proxy statement. If this proposal is approved by the affirmative vote of a majority of the voting power of shares of outstanding stock of NCR entitled to vote thereon, but less than the affirmative vote of holders representing eighty percent of the voting power of all shares of outstanding stock of NCR entitled to vote generally in the election of directors, the Company will cause to be filed with the State Department of Assessments and Taxation of Maryland Articles of Amendment and Restatement including the amendment to Section 6.2 of the Charter included in the Articles of Amendment and Restatement attached as Exhibit A to this proxy statement, but such filed Articles of Amendment and Restatement will not include the amendments relating to the elimination of the supermajority voting provisions in this proposal or the changes to the Charter to conform the language more closely to the MGCL. The Board of Directors does not know of any matters that will be brought before the Annual Meeting other than those listed in the notice of meeting. If any other matters are properly introduced at the meetingAnnual Meeting for consideration, including consideration of a motion to adjourn the meetingAnnual Meeting to another time or place, the individuals named on the enclosed form of proxy will have authority to vote on such matters in their discretion. | | Cost of Proxy Solicitation |
We will pay the expenses of soliciting proxies in connection with the Annual Meeting. Proxies may be solicited on our behalf through the mail, in person or by telephone, electronic or facsimile transmission. We have hired Innisfree M&A Incorporated to assist in the solicitation of proxies at an estimated cost of $40,000$35,000 plus reimbursement of reasonableout-of-pocket expenses. In accordance with SEC and NYSE rules, NCR also will reimburse brokerage houses and other custodians, nominees and fiduciaries for their expenses of sending proxies and proxy materials to the beneficial owners of NCR common stock and Series A Convertible Preferred Stock. | | Procedures for Nominations Using Proxy Access |
Stockholders interested in submitting nominations to the Board of Directors to be included in the Company’s 20192020 proxy materials pursuant to the proxy access provisions in Article I, Section 9 of the Company’s current bylaws must follow the procedures found in the Company’s bylaws. Nominations (containing the information specified in the bylaws regarding the stockholders and the proposed nominee) must be received by NCR’s Corporate Secretary no earlier than October 15, 2018,17, 2019, nor later than 5:00 p.m. Eastern Time on November 14, 2018.16, 2019. | | Procedures for Stockholder Proposals and Nominations for 20192020 Annual Meeting Pursuant to SEC Rule14a-8 |
Stockholders interested in presenting a proposal pursuant to SEC Rule14a-8 for possible inclusion in the proxy materials for NCR’s 20192020 Annual Meeting of Stockholders must follow the procedures found in SEC Rule14a-8 and the Company’s bylaws. To be eligible for possible inclusion in the Company’s 20192020 proxy materials, all qualified proposals must be received by NCR’s Corporate Secretary no later than 5:00 p.m. Eastern Time on November 14, 2018.16, 2019. | | Procedures for Stockholder Proposals and Nominations for 20192020 Annual Meeting Outside of SEC Rule14a-8 |
Under the Company’s current bylaws, nominations for election of directors and proposals for other business to be considered by the stockholders at an annual meeting outside of SEC Rule14a-8 may be made only: (i) pursuant to the Company’s notice of meeting; (ii) by or at the direction of the Board; or (iii) by any stockholder of the Company who was a stockholder of record both at the time of giving of notice as provided for in our bylaws and at the time of the annual meeting, who is entitled to vote at the meeting in the election of each individual so nominated or on any such other business and who has provided the information required by our Bylaws and delivered notice to the Company no earlier than 150 days (October 17, 2019) nor later than 5:00 p.m., Eastern Time, 120 days (November 16, 2019) before the first anniversary of the date of the proxy statement for the preceding year’s annual meeting. A copy of the full text of the Company’s current bylaws may be obtained upon written request to the Corporate Secretary at the address provided on page 627 of this proxy statement and online at http://www.ncr.com/company/corporate-governance. | | Supplementary Non-GAAP Information |
While NCR reports its results in accordance with Generally Accepted Accounting Principles in the United States, or GAAP, in this proxy statement NCR also uses certainnon-GAAP measures which are described below. Free Cash Flow.NCR defines free cash flow as net cash provided by/used in operating activities and cash flow provided by/used in discontinued operations less capital expenditures for property, plant and equipment, additions to capitalized software, discretionary pension contributions and pension settlements. NCR’s management uses free cash flow to assess the financial performance of the Company and believes it is useful for investors because it relates the operating cash flow of the Company to the capital that is spent to continue and improve business operations. In particular, free cash flow indicates the amount of cash generated after capital expenditures which can be used for, among other things, investment in the Company’s existing businesses, strategic acquisitions, strengthening the Company’s balance sheet, repurchase of Company stock and repayment of the Company’s debt obligations. Free cash flow does not represent the residual cash flow available for discretionary expenditures as there may be other nondiscretionary expenditures that are not deducted from the measure. Free cash flow does not have a uniform definition under GAAP and, therefore, NCR’s definitions may differ from other companies’ definitions of these measures. Free cash flow is reconciled to its most directly comparable GAAP measure in NCR’s Annual Report on Form10-K on pages 35 andpage 36. Non-GAAP (or Adjusted) Operating Income.NCR’sNon-GAAP (or Adjusted) Operating Income is determined by excluding pensionmark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition-related intangibles, from NCR’s GAAP income from operations. Due to thenon-operational nature of these pension and other special items, NCR’s management usesNon-GAAP Operating Income to evaluate year-over-year operating performance. NCR also usesNon-GAAP Operating Income to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes this measure is useful for investors because it provides a more complete understanding of NCR’s underlying operating performance, as well as consistency and comparability with NCR’s past reports of financialresults. Non-GAAP Operating Income is reconciled to its most directly comparable GAAP measure in NCR’s Annual Report on Form10-K on page 95.pages 101 and 102. Non-GAAP Diluted Earnings Per Share (EPS). NCR’sNon-GAAP Diluted EPS is determined by excluding pensionmark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition related intangibles, from NCR’s GAAP earnings per share. Due to thenon-operational nature of these pension and other special items, NCR’s management uses thisnon-GAAP measure to evaluate year-over-year operating performance. NCR also uses Non-GAAP Diluted EPS to manage and determine the effectiveness of its business managers and as a basis for incentive compensation. NCR believes this measure is useful for investors because it provides a more complete understanding of NCR’s underlying operational performance, as well as consistency and comparability with NCR’s past reports of financial results. NCR’sNon-GAAP EPS is reconciled to its most directly comparable GAAP measure below. | | | | | | | 2017 | | Diluted Earnings Per Share (GAAP)(1) | | $ | 1.01 | | Transformation/Restructuring Costs | | | 0.13 | | Acquisition-related amortization of intangibles | | | 0.51 | | Acquisition-related costs | | | 0.02 | | Deemed dividends related to Blackstone transaction | | | 0.39 | | Pensionmark-to-market adjustments | | | 0.16 | | Impact of U.S. tax reform | | | 0.84 | | Diluted Earnings Per Share(non-GAAP)(1) | | $ | 3.20 | |
| | | | | | | 2018 | | Diluted Earnings Per Share (GAAP)(1) | | $ | (0.72 | ) | Transformation/Restructuring Costs | | | 1.21 | | Acquisition-related amortization of intangibles | | | 0.45 | | Acquisition-related costs | | | 0.03 | | Goodwill & long-lived asset impairments | | | 1.16 | | Pensionmark-to-market adjustments | | | (0.29 | ) | Impact of U.S. tax reform | | | 0.30 | | Diluted Earnings Per Share(non-GAAP)(1) | | $ | 2.62 | |
(1)Non-GAAP diluted EPS is determined using the conversion of the Series A Convertible Preferred Stock into common stock in the calculation of weighted average diluted shares outstanding. GAAP EPS is determined using the most dilutive measure, either including the impact of dividends or deemed dividends on the Company’s Series A Convertible Preferred Stock in the calculation of net income or loss available to common stockholders or including the impact of the conversion of the Series A Convertible Preferred Stock into common stock in the calculation of the weighted average diluted shares outstanding. Therefore, GAAP diluted EPS andnon-GAAP diluted EPS may not mathematically reconcile. NCR management’s definitions and calculations of thesenon-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. Thesenon-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP. The above notice and proxy statement are sent by order of the Board of Directors. Edward GallagherJames M. Bedore
Executive Vice President, General Counsel and Secretary Dated: March 15, 2019 | | Exhibit A to 2019 Proxy Statement |
ARTICLES OF AMENDMENT AND RESTATEMENT OF NCR CORPORATION FIRST: NCR Corporation, a Maryland corporation (the “Corporation”), desires to amend and restate its charter as currently in effect and as hereinafter amended. SECOND: The following provisions and Exhibit A are all of the provisions of the Charter currently in effect and as hereinafter amended: ARTICLE I Name Section 1.1. The name of the Corporation (the “Corporation”) is: NCR Corporation. ARTICLE II Principal Office, Registered Office and Agent Section 2.1. The address of the Corporation’s principal office in the State of Maryland is 20370 Seneca Meadows Parkway, Germantown, Maryland 20876. The resident agent of the Corporation in the State of Maryland isCSC-Lawyers Incorporating Service Company. The address of the resident agent is 7 St. Paul Street, Suite 820, Baltimore, Maryland 21202. Such resident agent is a Maryland corporation. ARTICLE III Purposes Section 3.1. The purpose of the Corporation is to engage in any lawful act, activity or business for which corporations may be organized under the General Laws of the State of Maryland as now or hereafter in force. The Corporation shall have all the general powers granted by law to Maryland corporations and all other powers not inconsistent with law which are appropriate to promote and attain its purpose. ARTICLE IV Capital Stock Section 4.1. The Corporation shall be authorized to issue 600,000,000 shares of capital stock, of which 500,000,000 shares shall be classified as “Common Stock”, $.01 par value per share (“Common Stock”) (having an aggregate par value of $5,000,000.00), and 100,000,000 shares shall be classified as “Preferred Stock”, $.01 par value per share (“Preferred Stock”) (having an aggregate par value of $1,000,000.00), including those shares of Preferred Stock described in Exhibit A attached hereto. The aggregate par value of all authorized shares is $6,000,000.00. The Board of Directors may classify and reclassify any unissued shares of capital stock by setting or changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such shares of stock. Section 4.2. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. The holders of shares of Common Stock shall be entitled to one vote for each such share upon all proposals presented to the stockholders on which the holders of Common Stock are entitled to vote, except for proposals on which only the holders of another specified class or series of capital stock are entitled to vote. Subject to the provisions of law and any preference rights with respect to the payment of dividends attaching to the Preferred Stock or any series thereof, the holders of Common Stock shall be entitled to receive, as and when declared by the Board of Directors, dividends and other distributions authorized by the Board of Directors in accordance with Maryland General Corporation Law, as in effect from time to time (the “MGCL”) and to all other rights of a stockholder pursuant thereto. Except as otherwise provided by law or in the Charter of the Corporation (including in any Articles Supplementary (as defined below)) (the “Charter”), the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote. In the event of a liquidation, dissolution or winding up of the Corporation or other distribution of the Corporation’s assets among stockholders for the purpose of winding up the Corporation’s affairs, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation and subject to the rights, privileges, conditions and restrictions attaching to the Preferred Stock or any series thereof, the Common Stock shall entitle the holders thereof, together with the holders of any other class of stock hereafter classified or reclassified not having a preference on distributions in the liquidation, dissolution or winding up of the Corporation or other distribution of the Corporation’s assets among stockholders for the purpose of winding up the Corporation’s affairs, whether voluntary or involuntary, to share ratably in the remaining net assets of the Corporation. Section 4.3. The Preferred Stock may be issued from time to time in one or more series as authorized by the Board of Directors. The Board of Directors shall have the power from time to time to the maximum extent permitted by the MGCL to classify or reclassify, in one or more series, any unissued shares of Preferred Stock, and to reclassify any unissued shares of any series of Preferred Stock, in any such case, by setting or changing the number of shares constituting such series and the designation, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption of the stock. In any such event, the Corporation shall file for record with the State Department of Assessments and Taxation of Maryland (or other appropriate entity) articles supplementary in form and substance prescribed by the MGCL (each, an “Articles Supplementary”). Subject to the express terms of any series of Preferred Stock outstanding at the time, the Board of Directors may increase or decrease the number or alter the designation or classify or reclassify any unissued shares of a particular series of Preferred Stock by fixing or altering in one or more respects, from time to time before issuing the shares, any terms, rights, restrictions and qualifications of the shares, including any preference, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of the shares of the series. Section 4.4. Subject to the foregoing, the power of the Board of Directors to classify and reclassify any of the shares of capital stock shall include, without limitation, subject to the provisions of the Charter, authority to classify or reclassify any unissued shares of such stock into a class or classes of preferred stock, preference stock, special stock or other stock, and to divide and classify shares of any class into one or more series of such class, by determining, fixing or altering one or more of the following: (a) the designation of such class or series, which may be by distinguishing number, letter or title: (b) the number of shares of such class or series, which number the Board of Directors may thereafter (except where otherwise provided in the Articles Supplementary) increase or decrease (but not below the number of shares thereof then outstanding) and any shares of any class or series which have been redeemed, purchased, otherwise acquired or converted into shares of Common Stock or any other class or series shall become part of the authorized capital stock and be subject to classification and reclassification as provided in this Section; (c) whether dividends, if any, shall be cumulative or noncumulative, and, in the case of shares of any class or series having cumulative dividend rights, the date or dates or method of determining the date or dates from which dividends on the shares of such class or series shall be cumulative; (d) the rate of any dividends (or method of determining such dividends) payable to the holders of the shares of such class or series, any conditions upon which such dividends shall be paid and the date or dates or the method for determining the date or dates upon which such dividends shall be payable, and whether any such dividends shall rank senior or junior to or on a parity with the dividends payable on any other class or series of stock; (e) the price or prices (or method of determining such price or prices) at which, the form of payment of such price or prices (which may be cash, property or rights, including securities of the same or another corporation or other entity) for which, the period or periods within which and the terms and conditions upon which the shares of such class or series may be redeemed, in whole or in part, at the option of the Corporation or at the option of the holder or holders thereof or upon the happening of a specified event or events, if any; (f) the obligation, if any, of the Corporation to purchase or redeem shares of such class or series pursuant to a sinking fund or otherwise and the price or prices at which, the form of payment of such price or prices (which may be cash, property or rights, including securities of the same or another corporation or other entity) for which, the period or periods within which and the terms and conditions upon which the shares of such class or series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (g) the rights of the holders of shares of such class or series upon the liquidation, dissolution or winding up of the affairs of, or upon any distribution of the assets of, the Corporation, which rights may vary depending upon whether such liquidation, dissolution or winding up is voluntary or involuntary and, if voluntary, may vary at different dates, and whether such rights shall rank senior or junior to or on a parity with such rights of any other class or series of stock; (h) provisions, if any, for the conversion or exchange of the shares of such class or series, at any time or times at the option of the holder or holders thereof or at the option of the Corporation or upon the happening of a specified event or events, into shares of any other class or classes or any other series of the same or any other class or classes of stock, or any other security, of the Corporation, or any other corporation or other entity, and the price or prices or rate or rates of conversion or exchange and any adjustments applicable thereto, and all other terms and conditions upon which such conversion or exchange may be made; (i) restrictions on the issuance of shares of the same series or of any other class or series, if any; (j) the voting rights, if any, of the holders of shares of such class or series in addition to any voting rights required by law; (k) whether or not there shall be any limitations applicable, while shares of such class or series are outstanding, upon the payment of dividends or making of distributions on, or the acquisition of, or the use of moneys for purchase or redemption of, any stock of the Corporation, or upon any other action of the Corporation, including action under this Section, and, if so, the terms and conditions thereof; and (l) any other preferences, rights, restrictions, including restrictions on transferability, and qualifications of shares of such class or series, not inconsistent with law and the Charter. Section 4.5. For the purposes hereof and of any Articles Supplementary to the Charter providing for the classification or reclassification of any shares of capital stock or of any other charter document of the Corporation (unless otherwise provided in any such article or document), any class or series of stock of the Corporation shall be deemed to rank: (a) prior to another class or series either as to dividends or upon liquidation, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable on liquidation, dissolution or winding up, as the case may be, in preference or priority to holders of such other class or series; (b) on a parity with another class or series either as to dividends or upon liquidation, whether or not the dividend rates, dividend payment dates or redemption or liquidation price per share thereof be different from those of such others, if the holders of such class or series of stock shall be entitled to receipt of dividends or amounts distributable upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend rates or redemption or liquidation prices, without preference or priority over the holders of such other class or series; and (c) junior to another class or series either as to dividends or upon liquidation, if the rights of the holders of such class or series shall be subject or subordinate to the rights of the holders of such other class or series in respect of the receipt of dividends or the amounts distributable upon liquidation, dissolution or winding up, as the case may be. Section 4.6. (a) In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of shares or otherwise, is permitted under the MGCL, no effect shall be given to amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights upon dissolution are junior to those receiving the distribution. (b) The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law. (c) Except as may be set forth in any Articles Supplementary, the Board of Directors is hereby expressly authorized pursuant toSection 2-309(b)(5) of the MGCL (or any successor similar or comparable provision) to declare or pay a dividend payable in shares of one class of the Corporation’s stock to the holders of shares of such class of the Corporation’s stock or to the holders of shares of any other class of stock of the Corporation. ARTICLE V Stockholder Action Section 5.1. Except as may be provided in any Articles Supplementary, any corporate action upon which a vote of stockholder is required or permitted may be taken without a meeting or vote of stockholders only with the unanimous written consent of stockholders entitled to vote thereon. Section 5.2. Except as otherwise required by the MGCL or as provided elsewhere in the Charter or in the Bylaws, special meetings of stockholders of the Corporation for any purpose or purposes may be called only by the Board of Directors or by the President of the Corporation. No business other than that stated in the notice of the special meeting shall be transacted at such special meeting. Each of the Board of Directors, the President and Secretary of the Corporation shall have the maximum power and authority permitted by the MGCL with respect to the establishment of the date of any special meeting of stockholders, the establishment of the record date for stockholders entitled to vote thereat, the imposition of conditions on the conduct of any special meeting of stockholders and all other matters relating to the call, conduct, adjournment or postponement of any special meeting, regardless of whether the meeting was convened by the Board of Directors, the President, the stockholders of the Corporation or otherwise. ARTICLE VI Provisions Defining, Limiting and Regulating Powers Section 6.1. The following provisions are hereby adopted for the purposes of defining, limiting and regulating the powers of the Corporation and the directors and stockholders, subject, however, to any provisions, conditions and restrictions hereafter authorized pursuant to Article IV hereof: (a) The Board of Directors of the Corporation is empowered to authorize the issuance from time to time of shares of its stock of any class, whether now or hereafter authorized, and securities convertible into shares of its stock of any class, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable, and without any action by the stockholders. (b) No holder of any stock or any other securities of the Corporation, whether now or hereafter authorized, shall have any preemptive right to subscribe for or purchase any stock or any other securities of the Corporation other than such, if any, as the Board of Directors, in its sole discretion, may determine and at such price or prices and upon such other terms as the Board of Directors, in its sole discretion, may fix; and any stock or other securities which the Board of Directors may determine to offer for subscription may, as the Board of Directors in its sole discretion shall determine, be offered to the holders of any class, series or type of stock or other securities at the time outstanding to the exclusion of the holders of any or all other classes, series or types of stock or other securities at the time outstanding. (c) The Board of Directors of the Corporation shall, consistent with applicable law, have power in its sole discretion to determine from time to time in accordance with sound accounting practice or other reasonable valuation methods what constitutes annual or other net profits, earnings, surplus, or net assets in excess of capital; to fix and vary from time to time the amount to be reserved as working capital, or determine that retained earnings or surplus shall remain in the hands of the Corporation; to set apart out of any finds of the Corporation such reserve or reserves in such amount or amounts and for such proper purpose or purposes as it shall determine and to abolish any such reserve or any part thereof; to distribute and pay distributions or dividends in stock, cash or other securities or property, out of surplus or any other funds or amounts legally available therefor, at such times and to the stockholders of record on such dates as it may, from time to time, determine. Section 6.2.Unless provided to the contrary in the MGCL or other applicable law,Notwithstanding any provision of law requiring any action to be taken or approved by the affirmative vote of stockholders entitled to cast a greater number of votes, except as may otherwise be specifically provided elsewhere in the Charter or the Bylaws,any such action shall be effective and valid if declared advisable by the Board of Directors and taken or approved bythe affirmative vote of stockholders entitled to cast a majority ofthe voting power of the shares present in person or represented by proxy at the meeting andall the votes entitled tovotebe cast on the matter shall be the act of the stockholders. Section 6.3. No directors shall be disqualified from voting or acting on behalf of the Corporation in contracting with any other corporation in which he may be a director, officer or stockholder, nor shall any director of the Corporation be disqualified from voting or acting in its behalf by reason of any personal interest. Section 6.4. The Board of Directors shall have power to determine from time to time whether and to what extent and at what times and places and under what conditions and regulations the books, records, accounts and documents of the Corporation, or any of them, shall be open to inspection by stockholders, except as otherwise provided by law or by the Bylaws; and except as so provided no stockholder shall have any right to inspect any book, record, account or document of the Corporation unless authorized to do so by resolution of the Board of Directors. Section 6.5. The enumeration and definition of particular powers of the Board of Directors included in the foregoing shall in no way be limited or restricted by reference to or inference from the terms of any other clause of this or any other Article of the Charter of the Corporation, or construed as or deemed by inference or otherwise in any manner to exclude or limit any powers conferred upon the Board of Directors under the General Laws of the State of Maryland now or hereafter in force. ARTICLE VII Board of Directors Section 7.1. (a) The Corporation shall have nine1 directors, which number may be increased or decreased from time to time in such lawful manner as the Bylaws of the Corporation shall provide, but shall never be less than the minimum number permitted by the General Laws of the State of Maryland, as now or hereafter in force. (b) At the annual meeting of stockholders of the Corporation held in 2017, the successors to the directors whose terms expire at the annual meeting of stockholders in 2017 shall be elected to serve until the next annual meeting of stockholders and until their successors are duly elected and qualify; at the annual meeting of stockholders of the Corporation held in 2018, the successors to the directors whose terms expire at the annual meeting of stockholders in 2018 shall be elected to serve until the next annual meeting of stockholders and until their successors are duly elected and qualify; and beginning with the annual meeting of stockholders in 2019, all directors shall be elected to serve until the next annual meeting of stockholders and until their successors are duly elected and qualify. (c) Except as provided by law with respect to directors elected by stockholders of a class or series, any director or the entire Board of Directors may be removedonlyfor cause,and then onlyby the affirmative vote ofthe holders of not less than 80% of the voting power of all Voting Stock (as defined below) then outstanding, voting together as a single class. a majority of all the votes entitled to be cast on the matter. Subject to such removal, or the death, resignation or retirement of a director, a director shallhold officeserve until the annual meeting of the stockholders for the year in which such director’s term expires and until a successor shall be elected and qualified, except as provided in Section 7.1(d) hereof. (d) Except as provided by law with respect to directors elected by stockholders of a class or series,the stockholders of any class or series of stock (including holders of Common Stock) may elect a successor to filla vacancy on the Board of Directors which results from the removal of a directormay be filled by the affirmative vote of the holders of not less than 80% of the voting power of the then outstanding Voting Stock, voting together as a single class, and a vacancy which results from any such removal or from any other causeelected by holders of that class or series of stock (including holders of Common Stock). Any vacancy on the Board of Directors created by any reason other than an increase in the number of directors may be filled by a majority of the remaining directors, whether or not sufficient to constitute a quorum. Any vacancy on the Board of Directors created by an increase in the number of directors may be filled by a majority of the Board of 1 | Total number of directors will be updated, as applicable to match the current number of directors at the time of filing. |
Directors. Any director so elected by the Board of Directors shallhold officeserve until the next annual meeting of stockholders and until his successor is elected and qualifies and any directorsoelected by the stockholders shallhold officeserve for the remainder of the term of the removed director. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. (e) Except to the extent prohibited by law or limited by the Charter or the Bylaws, the Board of Directors shall have the power (which, to the extent exercised, shall be exclusive) to fix the number of directors and to establish the rules and procedures that govern the internal affairs of the Board of Directors and nominations for director, including without limitation the vote required for any action by the Board of Directors, and that from time to timeshallmay affect thedirectors’ power to managepower of the Board of Directors to direct the management of the business and affairs of the Corporation and no Bylaw shall be adopted by the stockholders which shall modify the foregoing. Section 7.2. Advance notice of stockholder nominations for the election of directors and of the proposal of business by stockholders shall be given in the manner provided in the Bylaws of the Corporation, as amended and in effect from time to time. Unless and except to the extent that the Bylaws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot. ARTICLE VIII Bylaws Section 8.1. The Bylaws may contain any provision for the regulation and management of the affairs of the Corporation not inconsistent with law or the provisions of the Charter. Without limiting the foregoing, to the maximum extent permitted by the MGCL from time to time, the Corporation may in its Bylaws confer upon the Board of Directors powers and authorities in addition to those set forth in the Charter and in addition to those expressly conferred upon the Board of Directors by statute as long as such powers and authorities are not inconsistent with the provisions of the Charter. Section 8.2. Except as provided in the Charter, the Bylaws may be altered or repealed and new Bylaws may be adopted (a) subject to Section 7.1(e), at any annual or special meeting of stockholders, by the affirmative vote of the holders of a majority of the voting power of all shares of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”) then outstanding, voting together as a single class; provided, however, that any proposed alteration or repeal of, or the adoption of any Bylaw inconsistent with, Sections 2, 8 or 11 of Article I of the Bylaws, with Section 1, 2 or 3 of Article II of the Bylaws, or Article X of the Bylaws or this sentence, by the stockholders shall require the affirmative vote of the holders of at least 80% of the voting power of all Voting Stock then outstanding, voting together as a single class; and provided, further, however, that in the case of any such stockholder action at a special meeting of stockholders, notice of the proposed alteration, repeal or adoption of the new Bylaw or Bylaws must be contained in the notice of such special meeting, or (b) by the affirmative vote of a majority of the total number of directors which the Corporation would have if there were no vacancies on the Board. Section 8.2. The Board of Directors is vested with the power to alter or repeal any provision of the Bylaws and to adopt new Bylaws. In addition, to the extent permitted by law, the stockholders may alter or repeal any provision of the Bylaws and adopt new Bylaw provisions if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of the votes entitled to be cast on the matter.
ARTICLE IX Amendment of Charter Section 9.1. The Corporation reserves the right to adopt, repeal, rescind, alter or otherwise amend in any respect any provision contained in this Charter, including but not limited to, any amendments changing the terms or contract rights of any class of its stock by classification, reclassification or otherwise, and all rights now or hereafter conferred on stockholders are granted subject to this reservation. Any amendmentofto the Charter shall bevalid and effective if such amendment shall have been authorizedeffective and valid if declared advisable by the Board of Directors and taken or approved by the affirmative voteat a meetingofthe stockholdersduly called for such purpose ofentitled to cast a majority ofthe total number of shares outstanding and entitled to vote thereon, except that the affirmative vote of the holders of at least 80% of the Voting Stock then outstanding, voting together as a single class, at a meeting of the stockholders duly called for such purpose shall be required to alter, amend, adopt any provision inconsistent with or repeal Article V, Article VII, Section 8.2 of Article VIII, or this Article IX of the Charterall the votes entitled to be cast on the matter. ARTICLE X Limited Liability; Indemnification Section 10.1. To the fullest extent permitted by Maryland statutory or decisional law, as amended or interpreted, no director or officer of the Corporation shall be personally liable to the Corporation or its stockholders for money damages. No amendment of the Charter of the Corporation or repeal of any of its provisions shall limit or eliminate the benefits provided to directors and officers under this provision with respect to any act or omission which occurred prior to such amendment or repeal or with respect to any cause of action, suit or claim that, but for this Section 10.1 of this Article X, would accrue or arise, prior to such amendment or repeal. Section 10.2. The Corporation shall indemnify (a) its directors and officers, whether serving the Corporation or, at its request, any other entity, to the fullest extent required or permitted by the General Laws of the State of Maryland now or hereafter in force, including the advance of expenses under the procedures and to the fullest extent permitted by law and (b) other employees and agents to such extent as shall be authorized by the Board of Directors or the Corporation’s Bylaws and be permitted by law. The foregoing rights of indemnification shall not be exclusive of any other rights to which those seeking indemnification may be entitled. The Board of Directors may take such action as is necessary to carry out these indemnification provisions and is expressly empowered to adopt, approve and amend from time to time such bylaws, resolutions or contracts implementing such provisions or such further indemnification arrangements as may be permitted by law. No amendment of the Charter, or of any such bylaw, resolution or contract, or repeal of any of their provisions shall limit or eliminate the right to indemnification provided hereunder or thereunder with respect to acts or omissions occurring prior to such amendment or repeal. ARTICLE XI Duration Section 11.1. The duration of the Corporation shall be perpetual. THIRD: The amendment to and restatement of the charter as hereinabove set forth have been duly advised by the Board of Directors and approved by the stockholders of the Corporation as required by law. FOURTH: The current address of the principal office of the Corporation is as set forth in Article II of the foregoing amendment and restatement of the charter. FIFTH: The name and address of the Corporation’s current resident agent is as set forth in Article II of the foregoing amendment and restatement of the charter. SIXTH: The number of directors of the Corporation is as set forth in Article VII of the foregoing amendment and restatement of the charter. The names of the directors currently in officeand the classes of each director are as follows: Class A: William R. Nuti, Gary J. Daichendt, Robert P. DeRodes
Class B: Edward Boykin, Linda Fayne Levinson, Chinh E. Chu
Class C: Gregory R. Blank, Richard L. Clemmer, Kurt P. Kuehn
[•] SEVENTH: The undersigned officer of the Corporation acknowledges these Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. - Signature Page Follows - IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by itsSenior Vice President, General Counsel and Corporate Secretary[•] and attested to by itsAssistant Secretary[•] on this18th[•] day ofMay[•],2016.[•]. Dated: March 14, 2018ATTEST: NCR
CORPORATION: /s/ Justin Heineman By: /s/ Edward Gallagher[•]
By: [•](SEAL) Name:Justin Heineman[•] Name:Edward Gallagher[•] Title:Assistant Secretary [•] Title:SVP and General Counsel[•] EXHIBIT A SERIES A CONVERTIBLE PREFERRED STOCK PAR VALUE $0.01 OF NCR CORPORATION Under a power contained in the charter (the “Charter”) of NCR Corporation, a Maryland corporation (the “Company”), the Board of Directors of the Company classified and designated[3,000,000] shares (the “Shares”) of the Preferred Stock, $0.01 par value per share (as defined in the Charter), as shares of Series A Convertible Preferred Stock, liquidation preference $1,000 per share (“Series A Preferred Stock”), with the following preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption set forth below, which upon any restatement of the Charter, shall be deemed to be part of Article IV of the Charter, with any necessary or appropriate changes to the enumeration or lettering of sections or subsections hereof: SECTION 1.Classification and Number of Shares. The shares of such series of Preferred Stock shall be classified as “Series A Convertible Preferred Stock” (the “Series A Preferred Stock”). The number of authorized shares constituting the Series A Preferred Stock shall be3,000,000.[3,000,000]. That number from time to time may be increased or decreased (but not below the number of shares of Series A Preferred Stock then outstanding) by (a) further resolution duly adopted by the Board, or any duly authorized committee thereof, and (b) the filing of articles supplementary pursuant to the provisions of the MGCL stating that such increase or decrease, as applicable, has been so authorized. The Company shall not have the authority to issue fractional shares of Series A Preferred Stock. SECTION 2. Ranking. The Series A Preferred Stock will rank, with respect to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company: (a) on a parity basis with each other class or series of Capital Stock of the Company now existing or hereafter authorized, classified or reclassified, the terms of which expressly provide that such class or series ranks on a parity basis with the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (such Capital Stock, “Parity Stock”); (b) junior to each other class or series of Capital Stock of the Company now existing or hereafter authorized, classified or reclassified, the terms of which expressly provide that such class or series ranks senior to the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (such Capital Stock, “Senior Stock”); and (c) senior to the Common Stock and each other class or series of Capital Stock of the Company now existing or hereafter authorized, classified or reclassified, the terms of which do not expressly provide that such class or series ranks on a parity basis with or senior to the Series A Preferred Stock as to dividend rights and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (such Capital Stock, “Junior Stock”). SECTION 3. Definitions. As used herein with respect to Series A Preferred Stock: “50% Beneficial Ownership Requirement” has the meaning set forth in the Investment Agreement. “Accrued Dividend Record Date” has the meaning set forth inSection 4(e). “Accrued Dividends” means, as of any date, with respect to any share of Series A Preferred Stock, all Dividends that have accrued on such share pursuant toSection 4(b), whether or not declared, but that have not, as of such date, been paid. “Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person;provided,however, (i) that the Company and its Subsidiaries shall not be deemed to be Affiliates of any Purchaser Party or any of its Affiliates, (ii) portfolio companies in which any Purchaser Party or any of its Affiliates has an investment (whether as debt or equity) shall not be deemed an Affiliate of such Purchaser Party and (iii) the Excluded Blackstone Parties shall not be deemed to be Affiliates of any Purchaser Party, the Company or any of the Company’s Subsidiaries. For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. “Articles Supplementary” means these Articles Supplementary classifying the Series A Preferred Stock. “Base Amount” means, with respect to any share of Series A Preferred Stock, as of any date of determination, the sum of (a) the Liquidation Preference and (b) the Base Amount Accrued Dividends with respect to such share as of such date. “Base Amount Accrued Dividends” means, with respect to any share of Series A Preferred Stock, as of any date of determination, (a) if a Dividend Payment Date has occurred since the issuance of such share, the Accrued Dividends with respect to such share as of the Dividend Payment Date immediately preceding such date of determination (taking into account the payment of Dividends, if any, on or with respect to such Dividend Payment Date) or (b) if no Dividend Payment Date has occurred since the issuance of such share, zero. Any Person shall be deemed to “beneficially own”, to have “beneficialownership” of, or to be “beneficially owning” any securities (which securities shall also be deemed “beneficially owned” by such Person) that such Person is deemed to “beneficially own” within the meaning of Rules13d-3 and13d-5 under the Exchange Act;provided that any Person shall be deemed to beneficially own any securities that such Person has the right to acquire, whether or not such right is exercisable within sixty (60) days or thereafter (including assuming conversion of all Series A Preferred Stock, if any, owned by such Person to Common Stock). “Board” has the meaning set forth in the recitals above. “close of business” means 5:00 p.m. (New York City time). “Business Day” means any weekday that is not a day on which banking institutions in New York, New York are authorized or required by law, regulation or executive order to be closed. “Bylaws” means the Amended and Restated Bylaws of the Company, as amended and as may be amended from time to time. “Capital Stock” means, with respect to any Person, any and all shares of, interests in, rights to purchase, warrants to purchase, options for, participations in or other equivalents of or interests in (however designated) stock issued by such Person. “Cash Dividend” has the meaning set forth inSection 4(c). “Change of Control” means (i) prior to the earlier of the (x) Initial Redemption Date or (y) the date that is 91 days after the date of repayment, defeasance, satisfaction, cancellation, termination or other permanent discharge in full of the Credit Agreement and the Indentures (the “Relevant Change of Control Date”), the occurrence of one of the following: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the “beneficial owner” (as defined in Rules13d-3 and13d-5 under the Exchange Act), directly or indirectly, of a majority of the total voting power of the Voting Stock of the Company, other than as a result of a transaction in which (1) the holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction are substantially the same as the holders of securities that represent a majority of the Voting Stock of the surviving Person or its Parent Entity immediately after such transaction and (2) the holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction own directly or indirectly Voting Stock of the surviving Person or its Parent Entity in substantially the same proportion to each other as immediately prior to such transaction; or (b) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (determined on a consolidated basis) to another Person, other than a transaction following which (1) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction, and (2) in the case of a sale of all or substantially all of the assets of the Company, other than to a Subsidiary or a Person that becomes a Subsidiary of the Company, or (ii) on or after the Relevant Change of Control Date, the occurrence of one of the following: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), is or becomes the “beneficial owner” (as defined in Rules13d-3 and13d-5 under the Exchange Act), directly or indirectly, of a majority of the total voting power of the Voting Stock of the Company, other than as a result of a transaction in which (1) the holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction are substantially the same as the holders of securities that represent a majority of the Voting Stock of the surviving Person or its Parent Entity immediately following such transaction and (2) the holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction own directly or indirectly Voting Stock of the surviving Person or its Parent Entity in substantially the same proportion to each other as immediately prior to such transaction; (b) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale, transfer or lease of all or substantially all the assets of the Company (determined on a consolidated basis), whether in a single transaction or a series of transactions, to another Person, or any recapitalization, reclassification or other transaction in which all or substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, other than a transaction following which (1) in the case of a merger or consolidation transaction, holders of securities that represented 100% of the Voting Stock of the Company immediately prior to such transaction (or other securities into which such securities are converted as part of such merger or consolidation transaction) own directly or indirectly at least a majority of the voting power of the Voting Stock of the surviving Person in such merger or consolidation transaction immediately after such transaction, and (2) in the case of a sale, transfer or lease of all or substantially all of the assets of the Company, other than to a Subsidiary or a Person that becomes a Subsidiary of the Company; or (c) any transaction or series of transactions by which the Company or any successor or Parent Entity thereto is organized outside the United States of America. “Change of Control Effective Date” has the meaning set forth inSection 9(c). “Change of Control Purchase Date” means, with respect to each share of Series A Preferred Stock, the date on which the Company makes the payment in full of the Change of Control Purchase Price for such share to the Holder thereof. “Change of Control Purchase Price” has the meaning set forth inSection 9(a). “Change of Control Put” has the meaning set forth inSection 9(a). “Change of Control Put Deadline” has the meaning set forth inSection 9(c)(i). “Charter” has the meaning set forth in the recitals above. “Closing Price” of the Common Stock on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price, of the shares of the Common Stock on the NYSE on such date. If the Common Stock is not traded on the NYSE on any date of determination, the Closing Price of the Common Stock on such date of determination means the closing sale price as reported in the composite transactions for the principal United States securities exchange or automated quotation system on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal United States securities exchange or automated quotation system on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a United States securities exchange or automated quotation system, the last quoted bid price for the Common Stock in theover-the-counter market as reported by OTC Markets Group Inc. or any similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by an Independent Financial Advisor retained by the Company for such purpose. “Common Stock” has the meaning set forth in the recitals above. “Company” has the meaning set forth in the recitals above. “Constituent Person” has the meaning set forth inSection 12(a). “Conversion Agent” means the Transfer Agent acting in its capacity as conversion agent for the Series A Preferred Stock, and its successors and assigns. “Conversion Date” has the meaning set forth inSection 8(a). “Conversion Notice” has the meaning set forth inSection 8(a). “Conversion Price” means, for each share of Series A Preferred Stock, a dollar amount equal to $1,000 divided by the Conversion Rate. “Conversion Rate” means, for each share of Series A Preferred Stock, 33.333 shares of Common Stock, subject to adjustment as set forth herein. “Credit Agreement” has the meaning set forth in the Investment Agreement. “Current Market Price” per share of Common Stock, as of any date of determination, means the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days ending on the Trading Day immediately preceding such day, appropriately adjusted to take into account the occurrence during such period of any event described inSection 11. “Designated Redemption Date” means (i) any date within the three (3) month period commencing on and immediately following the Initial Redemption Date and (ii) any date within the three (3) month period commencing on and immediately following each successive third anniversary of the Initial Redemption Date. “Distributed Property” has the meaning set forth inSection 11(a)(iv). “Distribution Transaction” means any transaction by which a Subsidiary of the Company ceases to be a Subsidiary of the Company by reason of the distribution of such Subsidiary’s equity securities to holders of Common Stock, whether by means of aspin-off,split-off, redemption, reclassification, exchange, stock dividend, share distribution, rights offering or similar transaction. “Dividend” has the meaning set forth inSection 4(a). “Dividend Payment Date” means March 10, June 10, September 10 and December 10 of each year, commencing on the later of (i) March 10, 2016 and (ii) the first such date to occur following the Original Issuance Date (the “Initial DividendPayment Date”);provided that if any such Dividend Payment Date is not a Business Day, then the applicable Dividend shall be payable on the next Business Day immediately following such Dividend Payment Date, without any interest. “Dividend Payment Period” means (i) in respect of any share of Series A Preferred Stock issued on the Original Issuance Date, the period from and including the Original Issuance Date to but excluding the Initial Dividend Payment Date and, subsequent to the Initial Dividend Payment Date, the period from and including any Dividend Payment Date to but excluding the next Dividend Payment Date, and (ii) for any share of Series A Preferred Stock issued subsequent to the Original Issuance Date, the period from and including the Issuance Date of such share to but excluding the next Dividend Payment Date and, subsequently, in each case the period from and including any Dividend Payment Date to but excluding the next Dividend Payment Date. “Dividend Rate” means 5.5%, or, to the extent and during the period with respect to which such rate has been adjusted as provided inSections 4(d),Section 9(i) orSection 10(e), such adjusted rate. “Dividend Record Date” has the meaning set forth inSection 4(e). “Exchange Act” means the Securities Exchange Act of 1934, as amended. “Exchange Property” has the meaning set forth inSection 12(a). “Excluded Blackstone Parties” has the meaning set forth in the Investment Agreement. “Expiration Date” has the meaning set forth inSection 11(a)(iii). “Fair Market Value” means, with respect to any security or other property, the fair market value of such security or other property as reasonably determined in good faith by a majority of the Board, or an authorized committee thereof, (i) after consultation with an Independent Financial Advisor, as to any security or other property with a Fair Market Value of less than $50,000,000, or (ii) otherwise using an Independent Financial Advisor to provide a valuation opinion. “Fall-Away of Purchaser Board Rights” has the meaning set forth in the Investment Agreement. “Governmental Authority” means any government, court, regulatory or administrative agency, commission, arbitrator or authority or other legislative, executive or judicial governmental entity (in each case including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational. “Holder” means a Person in whose name the shares of the Series A Preferred Stock are registered, which Person shall be treated by the Company, Transfer Agent, Registrar, paying agent and Conversion Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling conversions and for all other purposes;provided that, to the fullest extent permitted by law, no Person that has received shares of Series A Preferred Stock in violation of the Investment Agreement shall be a Holder, the Transfer Agent, Registrar, paying agent and Conversion Agent, as applicable, shall not, unless directed otherwise by the Company, recognize any such Person as a Holder and the Person in whose name the shares of the Series A Preferred Stock were registered immediately prior to such transfer shall remain the Holder of such shares. “Implied Quarterly Dividend Amount” means, with respect to any share of Series A Preferred Stock, as of any date, the product of (a) the Base Amount of such share on the first day of the applicable Dividend Payment Period (or in the case of the first Dividend Payment Period for such share, as of the Issuance Date of such share) multiplied by (b) one fourth of the Dividend Rate applicable on such date. “Indebtedness” means (a) all obligations of the Company or any of its Subsidiaries for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of the Company or any of its Subsidiaries evidenced by bonds, debentures, notes or similar instruments, (c) all letters of credit and letters of guaranty in respect of which the Company or any of its Subsidiaries is an account party, (d) all securitization or similar facilities of the Company or any of its Subsidiaries and (e) all guarantees by the Company or any of its Subsidiaries of any of the foregoing. “Indebtedness Agreement” means any agreement, document or instrument governing or evidencing any Indebtedness of the Company or its Subsidiaries. “Indentures” has the meaning set forth in the Investment Agreement. “Independent Financial Advisor” means an accounting, appraisal, investment banking firm or consultant of nationally recognized standing;provided,however, that such firm or consultant is (i) not an Affiliate of the Company and (ii) so long as the Purchasers meet the 50% Beneficial Ownership Requirement, is reasonably acceptable to the Purchasers. “Initial Redemption Date” means March 16, 2024. “Investment Agreement” means that certain Investment Agreement between the Company and the Purchasers dated as of November 11, 2015, as it may be amended, supplemented or otherwise modified from time to time, with respect to certain terms and conditions concerning, among other things, the rights of and restrictions on the Holders. “Issuance Date” means, with respect to any share of Series A Preferred Stock, the date of issuance of such share. “Junior Stock” has the meaning set forth inSection 2(c). “Liquidation Preference” means, with respect to any share of Series A Preferred Stock, as of any date, $1,000 per share. “Mandatory Conversion” has the meaning set forth inSection 7(a). “Mandatory Conversion Date” has the meaning set forth inSection 7(a). “Mandatory Conversion Price” means $54.00, as adjusted pursuant to the provisions ofSection 11(a). “Market Disruption Event” means any of the following events: (a) any suspension of, or limitation imposed on, trading of the Common Stock by any exchange or quotation system on which the Closing Price is determined pursuant to the definition of the term “Closing Price” (the “Relevant Exchange”) during theone-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) and whether by reason of movements in price exceeding limits permitted by the Relevant Exchange as to securities generally, or otherwise relating to the Common Stock or options contracts relating to the Common Stock on the Relevant Exchange; or (b) any event that disrupts or impairs (as determined by the Company in its reasonable discretion) the ability of market participants during theone-hour period prior to the close of trading for the regular trading session on the Relevant Exchange (or for purposes of determining the VWAP per share of Common Stock, any period or periods aggregating one half-hour or longer during the regular trading session on the relevant day) in general to effect transactions in, or obtain market values for, the Common Stock on the Relevant Exchange or to effect transactions in, or obtain market values for, options contracts relating to the Common Stock on the Relevant Exchange. “MGCL” has the meaning set forth in the recitals above. “Notice of Mandatory Conversion” has the meaning set forth inSection 7(b). “Notice of Redemption” has the meaning set forth inSection 10(b). “NYSE” means the New York Stock Exchange. “Officer’s Certificate” means a certificate signed by the Chief Executive Officer, the Chief Financial Officer or the Secretary of the Company. “open of business” means 9:00 a.m. (New York City time). “Original Issuance Date” and “Original Issuance Time” mean the date and time, respectively, of closing pursuant to the Investment Agreement. “Parent Entity” means, with respect to any Person, any other Person of which such first Person is a direct or indirect wholly owned Subsidiary. “Parity Stock” has the meaning set forth inSection 2(a). “Permitted Transferee” means, with respect to any Person, (i) any Affiliate of such Person, (ii) any successor entity of such Person and (iii) with respect to any Person that is an investment fund, vehicle or similar entity, any other investment fund, vehicle or similar entity of which such Person or an Affiliate, advisor or manager of such Person serves as the general partner, manager or advisor. “Person” means any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any other entity. “PIK Dividend” has the meaning set forth inSection 4(c). “Preferred Stock” has the meaning set forth in the recitals above. “Purchasers” has the meaning set forth in the Investment Agreement. “Purchaser Designee” means an individual nominated by the Board as a “Purchaser Designee” for election to the Board pursuant toSection 5.10(a) orSection 5.10(d) of the Investment Agreement. “Purchaser Parties” means the Purchasers and each Permitted Transferee of the Purchasers to whom shares of Series A Preferred Stock or Common Stock are transferred pursuant toSection 5.08(b)(i) of the Investment Agreement. “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of the Common Stock have the right to receive any cash, securities or other property or in which the Common Stock is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock entitled to receive such cash, securities or other property (whether such date is fixed by the Board or by statute, contract or otherwise). “Redemption Date” means, with respect to each share of Series A Preferred Stock, the date on which the Company makes the payment in full in cash of the Redemption Price for such share to the Holder of such share. “Redemption Right” has the meaning set forth inSection 10(a). “Redemption Price” has the meaning set forth inSection 10(a). “Registrar” means the Transfer Agent acting in its capacity as registrar for the Series A Preferred Stock, and its successors and assigns. “Relevant Exchange” has the meaning set forth in the definition of the term “Market Disruption Event”. “Reorganization Event” has the meaning set forth inSection 12(a). “Satisfaction of the Indebtedness Obligations” means, in connection with any Change of Control, (i) the payment in full in cash of all principal, interest, fees and all other amounts due or payable in respect of any Indebtedness of the Company or any of its Subsidiaries (including in respect of any penalty or premium) that is required to be prepaid, repaid, redeemed, repurchased or otherwise retired as a result of or in connection with such Change of Control or in order for the Series A Preferred Stock not to constitute or be deemed as “indebtedness”, “disqualified stock”, “disqualified capital stock”, “disqualified equity interests”, or similar instruments, however denominated, under the terms of any Indebtedness Agreement, (ii) the cancellation or termination, or if permitted by the terms of such Indebtedness, cash collateralization, of any letters of credit or letters of guaranty that are required to be cancelled or terminated or cash collateralized as a result of or in connection with such Change of Control or in order for the Series A Preferred Stock not to constitute or be deemed as “indebtedness”, “disqualified stock”, “disqualified capital stock”, “disqualified equity interests”, or similar instruments, however denominated, under the terms of any Indebtedness Agreement, (iii) compliance with any requirement to effect an offer to purchase any bonds, debentures, notes or other instruments of Indebtedness as a result of or in connection with such Change of Control or in order for the Series A Preferred Stock not to constitute or be deemed as “indebtedness”, “disqualified stock”, “disqualified capital stock”, “disqualified equity interests”, or similar instruments, however denominated, under the terms of any Indebtedness Agreement, and the purchase of any such instruments tendered in such offer and the payment in full of any other amounts due or payable in connection with such purchase and (iv) the termination of any lending commitments required to be terminated as a result of or in connection with such Change of Control or in order for the Series A Preferred Stock not to constitute or be deemed as “indebtedness”, “disqualified stock”, “disqualified capital stock”, “disqualified equity interests”, or similar instruments, however denominated, under the terms of any Indebtedness Agreement. “SDAT” has the meaning set forth in the recitals above. “Senior Stock” has the meaning set forth inSection 2(b). “Series A Preferred Stock” has the meaning set forth inSection 1. “Specified Contract Terms” means the covenants, terms and provisions of any indenture, credit agreement or any other agreement, document or instrument evidencing, governing the rights of the holders of or otherwise relating to any Indebtedness of the Company or any of its Subsidiaries. “Subsidiary”, when used with respect to any Person, means any corporation, limited liability company, partnership, association, trust or other entity of which (i) securities or other ownership interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) or (ii) sufficient voting rights to elect at least a majority of the board of directors or other governing body are, as of such date, owned by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. “Trading Day” means a Business Day on which the Relevant Exchange is scheduled to be open for business and on which there has not occurred a Market Disruption Event. “Transfer Agent” means the Person acting as Transfer Agent, Registrar and paying agent and Conversion Agent for the Series A Preferred Stock, and its successors and assigns. The Transfer Agent initially shall be Wells Fargo Bank, N. A. “Trigger Event” has the meaning set forth inSection 11(a)(vii). “Voting Stock” means (i) with respect to the Company, the Common Stock, the Series A Preferred Stock and any other Capital Stock of the Company having the right to vote generally in any election of directors of the Board and (ii) with respect to any other Person, all Capital Stock of such Person having the right to vote generally in any election of directors of the board of directors of such Person or other similar governing body. “VWAP” per share of Common Stock on any Trading Day means the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg (or, if Bloomberg ceases to publish such price, any successor service reasonably chosen by the Company) page “NCR <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of Common Stock on such Trading Day determined, using a volume-weighted average method, by an Independent Financial Advisor retained for such purpose by the Company). SECTION 4. Dividends. (a) Holders shall be entitled to receive dividends of the type and in the amount determined as set forth in thisSection 4 (such dividends, “Dividends”). (b) Accrual of Dividends. Dividends on each share of Series A Preferred Stock (i) shall accrue on a daily basis from and including the Issuance Date of such share, whether or not declared and whether or not the Company has assets legally available to make payment thereof, at a rate equal to the Dividend Rate as further specified below and (ii) shall be payable quarterly in arrears, if, as and when authorized by the Board, or any duly authorized committee thereof, and declared by the Company, to the extent not prohibited by law, on each Dividend Payment Date, commencing on the first Dividend Payment Date following the Issuance Date of such share. The amount of Dividends accruing with respect to any share of Series A Preferred Stock for any day shall be determined by dividing (x) the Implied Quarterly Dividend Amount as of such day by (y) the actual number of days in the Dividend Payment Period in which such day falls;provided that if during any Dividend Payment Period any Accrued Dividends in respect of one or more prior Dividend Payment Periods are paid, then after the date of such payment the amount of Dividends accruing with respect to any share of Series A Preferred Stock for any day shall be determined by dividing (x) the Implied Quarterly Dividend Amount (recalculated to take into account such payment of Accrued Dividends) by (y) the actual number of days in such Dividend Payment Period. The amount of Dividends payable with respect to any share of Series A Preferred Stock for any Dividend Payment Period shall equal the sum of the daily Dividend amounts accrued in accordance with the prior sentence of thisSection 4(b) with respect to such share during such Dividend Payment Period. For the avoidance of doubt, for any share of Series A Preferred Stock with an Issuance Date that is not a Dividend Payment Date, the amount of Dividends payable with respect to the initial Dividend Payment Period for such share shall equal the product of (A) the daily accrual determined as specified in the prior sentence, assuming a full Dividend Payment Period in accordance with the definition of such term, and (B) the number of days from and including such Issuance Date to but excluding the next Dividend Payment Date. (c) Payment of Dividend. (x) With respect to the first sixteen (16) Dividend Payment Dates, the Company will issue, to the extent permitted by applicable law, as a dividend in kind, additional duly authorized, validly issued and fully paid and nonassessable shares of Series A Preferred Stock (any Dividend or portion of a Dividend paid in the manner provided in this clause, a “PIK Dividend”) having value (as determined in accordance with the immediately following sentence) equal to the amount of Accrued Dividends during such Dividend Payment Period and (y) with respect to any Dividend Payment Date occurring after the sixteenth (16th) Dividend Payment Date, the Company will pay, to the extent permitted by applicable law, in its sole discretion, Dividends (i) in cash (any Dividend or portion of a Dividend paid in cash, a “Cash Dividend”), if, as and when authorized by the Board, or any duly authorized committee thereof, and declared by the Company, (ii) as a PIK Dividend or (iii) through a combination of either of the foregoing;provided that (A) Cash Dividend payments shall be aggregated per Holder and shall be made to the nearest cent (with $.005 being rounded upward) and (B) if the Company pays a PIK Dividend, no fractional shares of Series A Preferred Stock shall be issued to any Holder (after taking into account all shares of Series A Preferred Stock held by such Holder) and in lieu of any such fractional share, the Company shall pay to such Holder, at the Company’s option, either (1) an amount in cash equal to the applicable fraction of a share of Series A Preferred Stock multiplied by the Liquidation Preference per share of Series A Preferred Stock or (2) one additional whole share of Series A Preferred Stock. In the event that the Company pays a PIK Dividend, each share of Series A Preferred Stock paid in connection therewith shall have a deemed value for such purpose equal to the Liquidation Preference per share of Series A Preferred Stock, and the number of additional shares of Series A Preferred Stock issuable to Holders in connection with the payment of a PIK Dividend will be, with respect to each share of Series A Preferred Stock, and without limiting the proviso above concerning fractional shares, the number (or fraction) obtained from the quotient of (1) the amount of the applicable PIK Dividend per share of Series A Preferred Stock divided by (2) the Liquidation Preference per share of Series A Preferred Stock. Accrued Dividends in respect of any prior Dividend Payment Periods may be paid on any date (whether or not such date is a Dividend Payment Date) if, as and when authorized by the Board, or any duly authorized committee thereof as declared by the Company. (d) Arrearages. If the Company fails to declare and pay a full Dividend on the Series A Preferred Stock on any Dividend Payment Date, then any Dividends otherwise payable on such Dividend Payment Date on the Series A Preferred Stock shall continue to accrue and cumulate at a Dividend Rate of 8.0% per annum, payable quarterly in arrears on each Dividend Payment Date, for the period from and including the first Dividend Payment Date (or the Issuance Date, as applicable) upon which the Company fails to pay a full Dividend on the Series A Preferred Stock through but not including the latest of the day upon which the Company pays in accordance with Section 4(c) all Dividends on the Series A Preferred Stock that are then in arrears. Dividends shall accumulate from the most recent date through which Dividends shall have been paid, or, if no Dividends have been paid, from the Issuance Date. (e) Record Date. The record date for payment of Dividends that are declared and paid on any relevant Dividend Payment Date will be the close of business on the first (1st) day of the calendar month which contains the relevant Dividend Payment Date (each, a “Dividend Record Date”), and the record date for payment of any Accrued Dividends that were not declared and paid on any relevant Dividend Payment Date will be the close of business on the date that is established by the Board, or a duly authorized committee thereof, as such, which will not be more than forty-five (45) days prior to the date on which such Dividends are paid (each, an “Accrued Dividend Record Date”), in each case whether or not such day is a Business Day. (f) Priority of Dividends. So long as any shares of Series A Preferred Stock remain outstanding, unless full dividends on all outstanding shares of Series A Preferred Stock have been declared and paid, including any accrued and unpaid dividends on the Series A Preferred Stock that are then in arrears, or have been or contemporaneously are declared and a sum sufficient for the payment of those dividends has been or is set aside for the benefit of the Holders, the Company may not declare any dividend on, or make any distributions relating to, Junior Stock or Parity Stock, or redeem, purchase, acquire (either directly or through any Subsidiary) or make a liquidation payment relating to, any Junior Stock or Parity Stock, other than: (i) purchases, redemptions or other acquisitions of shares of Junior Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of current or former employees, officers, directors or consultants; (ii) purchases of Junior Stock through the use of the proceeds of a substantially contemporaneous sale of other shares of Junior Stock; (iii) as a result of an exchange or conversion of any class or series of Parity Stock or Junior Stock for any other class or series of Parity Stock (in the case of Parity Stock) or Junior Stock (in the case of Parity Stock or Junior Stock); (iv) purchases of fractional interests in shares of Parity Stock or Junior Stock pursuant to the conversion or exchange provisions of such Parity Stock or Junior Stock or the security being converted or exchanged; (v) payment of any dividends in respect of Junior Stock where the dividend is in the form of the same stock or rights to purchase the same stock as that on which the dividend is being paid; (vi) distributions of Junior Stock or rights to purchase Junior Stock; (vii) any dividend in connection with the implementation of a shareholders’ rights or similar plan, or the redemption or repurchase of any rights under any such; or (viii) purchases of shares of Common Stock by the Company in an amount not to exceed $1,000,000,000 to be consummated within 9 months following the Original Issuance Date. Notwithstanding the foregoing, for so long as any shares of Series A Preferred Stock remain outstanding, if dividends are not declared and paid in full upon the shares of Series A Preferred Stock and any Parity Stock, all dividends declared upon shares of Series A Preferred Stock and any Parity Stock will be declared on a proportional basis so that the amount of dividends declared per share will bear to each other the same ratio that all accrued and unpaid dividends as of the end of the most recent Dividend Payment Period per share of Series A Preferred Stock and accrued and unpaid dividends as of the end of the most recent dividend period per share of any Parity Stock bear to each other. Subject to the provisions of thisSection 4, dividends may be authorized by the Board, or any duly authorized committee thereof, and declared and paid by the Company, or any duly authorized committee thereof, on any Junior Stock and Parity Stock from time to time and the Holders will not be entitled to participate in those dividends (other than pursuant to the adjustments otherwise provided underSection 11(a) orSection 12(a), as applicable). (g) Conversion Following a Record Date. If the Conversion Date for any shares of Series A Preferred Stock is prior to the close of business on a Dividend Record Date or an Accrued Dividend Record Date, the Holder of such shares will not be entitled to any dividend in respect of such Dividend Record Date or Accrued Dividend Record Date, as applicable, other than through the inclusion of Accrued Dividends as of the Conversion Date in the calculation underSection 6(a) orSection 7(a), as applicable. If the Conversion Date for any shares of Series A Preferred Stock is after the close of business on a Dividend Record Date or an Accrued Dividend Record Date but prior to the corresponding payment date for such dividend, the Holder of such shares as of such Dividend Record Date or Accrued Dividend Record Date, as applicable, shall be entitled to receive such dividend, notwithstanding the conversion of such shares prior to the applicable Dividend Payment Date;provided that the amount of such dividend shall not be included for the purpose of determining the amount of Accrued Dividends under Section 6(a) orSection 7(a), as applicable, with respect to such Conversion Date. SECTION 5. Liquidation Rights. (a) Liquidation. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the Holders shall be entitled, out of assets legally available therefor, before any distribution or payment out of the assets of the Company may be made to or set aside for the holders of any Junior Stock, and subject to the rights of the holders of any Senior Stock or Parity Stock and the rights of the Company’s existing and future creditors, to receive in full a liquidating distribution in cash and in the amount per share of Series A Preferred Stock equal to the greater of (i) the sum of (A) the Liquidation Preference plus (B) the Accrued Dividends with respect to such share of Series A Preferred Stock as of the date of such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company and (ii) the amount such Holders would have received had such Holders, immediately prior to such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, converted such shares of Series A Preferred Stock into Common Stock (pursuant toSection 6 without regard to any of the limitations on convertibility contained therein). Holders shall not be entitled to any further payments in the event of any such voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company other than what is expressly provided for in thisSection 5 and will have no right or claim to any of the Company’s remaining assets. (b) Partial Payment. If in connection with any distribution described inSection 5(a) above, the assets of the Company or proceeds therefrom are not sufficient to pay in full the aggregate liquidating distributions required to be paid pursuant to Section 5(a) to all Holders and the liquidating distributions payable all holders of any Parity Stock, the amounts distributed to the Holders and to the holders of all such Parity Stock shall be paid pro rata in accordance with the respective aggregate liquidating distributions to which they would otherwise be entitled if all amounts payable thereon were paid in full. (c) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of thisSection 5, the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Company shall not be deemed a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, nor shall the merger, consolidation, statutory exchange or any other business combination transaction of the Company into or with any other Person or the merger, consolidation, statutory exchange or any other business combination transaction of any other Person into or with the Company be deemed to be a voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. SECTION 6.Right of the Holders to Convert. (a) Each Holder shall have the right, at such Holder’s option, subject to the conversion procedures set forth inSection 8, to convert each share of such Holder’s Series A Preferred Stock at any time into (i) the number of shares of Common Stock equal to the quotient of (A) the sum of the Liquidation Preference and the Accrued Dividends with respect to such share of Series A Preferred Stock as of the applicable Conversion Date divided by (B) the Conversion Price as of the applicable Conversion Dateplus (ii) cash in lieu of fractional shares as set out inSection 11(i). The right of conversion may be exercised as to all or any portion of such Holder’s Series A Preferred Stock from time to time;provided that, in each case, no right of conversion may be exercised by a Holder in respect of fewer than 1,000 shares of Series A Preferred Stock (unless such conversion relates to all shares of Series A Preferred Stock held by such Holder). (b) The Company shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for issuance upon the conversion of the Series A Preferred Stock, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series A Preferred Stock then outstanding. Any shares of Common Stock issued upon conversion of Series A Preferred Stock shall be duly authorized, validly issued, fully paid and nonassessable. SECTION 7.Mandatory Conversion by the Company. (a) At any time after the third anniversary of the Original Issuance Date, if the VWAP per share of Common Stock was greater than the Mandatory Conversion Price for at least thirty (30) Trading Days in any period of forty-five (45) consecutive Trading Days, the Company may elect to convert (a “Mandatory Conversion”) all, but not less than all, of the outstanding shares of Series A Preferred Stock into shares of Common Stock (the date selected by the Company for any Mandatory Conversion pursuant to thisSection 7(a), the “Mandatory Conversion Date”). In the case of a Mandatory Conversion, each share of Series A Preferred Stock then outstanding shall be converted into (i) the number of shares of Common Stock equal to the quotient of (A) the sum of the Liquidation Preference and the Accrued Dividends with respect to such share of Series A Preferred Stock as of the Mandatory Conversion Date divided by (B) the Conversion Price of such share in effect as of the Mandatory Conversion Dateplus (ii) cash in lieu of fractional shares as set out inSection 11(i). (b) Notice of Mandatory Conversion. If the Company elects to effect Mandatory Conversion, the Company shall, within ten (10) Business Days following the completion of the applicable forty-five (45) day Trading Period referred to inSection 7(a) above, provide notice of Mandatory Conversion to each Holder (such notice, a “Notice of Mandatory Conversion”). The Mandatory Conversion Date selected by the Company shall be no less than ten (10) Business Days and no more than twenty (20) Business Days after the date on which the Company provides the Notice of Mandatory Conversion to the Holders. The Notice of Mandatory Conversion shall state, as appropriate: (i) the Mandatory Conversion Date selected by the Company; and (ii) the Conversion Rate as in effect on the Mandatory Conversion Date, the number of shares of Common Stock to be issued to such Holder upon conversion of each share of Series A Preferred Stock held by such Holder and, if applicable, the amount of Accrued Dividends to be paid to such Holder upon conversion of each share of Series A Preferred Stock held by such Holder. SECTION 8. Conversion Procedures and Effect of Conversion. (a) Conversion Procedure. A Holder must do each of the following in order to convert shares of Series A Preferred Stock pursuant to thisSection 8(a): (i) in the case of a conversion pursuant toSection 6(a), complete and manually sign the conversion notice provided by the Conversion Agent (the “Conversion Notice”), and deliver such notice to the Conversion Agent;provided that a Conversion Notice may be conditional on the completion of a Change of Control or other corporate transaction; (ii) deliver to the Conversion Agent the certificate or certificates (if any) representing the shares of Series A Preferred Stock to be converted; (iii) if required, furnish appropriate endorsements and transfer documents; and (iv) if required, pay any stock transfer, documentary, stamp or similar taxes not payable by the Company pursuant toSection 21. The foregoing clauses (ii), (iii) and (iv) shall be conditions to the issuance of shares of Common Stock to the Holders in the event of a Mandatory Conversion pursuant toSection 7 (but, for the avoidance of doubt, not to the Mandatory Conversion of the shares of Series A Preferred Stock on the Mandatory Conversion Date). The “Conversion Date” means (A) with respect to conversion of any shares of Series A Preferred Stock at the option of any Holder pursuant toSection 6(a), the date on which such Holder complies with the procedures in thisSection 8(a) (including the satisfaction of any conditions to conversion set forth in the Conversion Notice) and (B) with respect to Mandatory Conversion pursuant toSection 7(a), the Mandatory Conversion Date. (b) Effect of Conversion. Effective immediately prior to the close of business on the Conversion Date applicable to any shares of Series A Preferred Stock, Dividends shall no longer accrue or be declared on any such shares of Series A Preferred Stock, and such shares of Series A Preferred Stock shall cease to be outstanding. (c) Record Holder of Underlying Securities as of Conversion Date. The Person or Persons entitled to receive the Common Stock and, to the extent applicable, cash, securities or other property issuable upon conversion of Series A Preferred Stock on a Conversion Date shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or cash, securities or other property as of the close of business on such Conversion Date. As promptly as practicable on or after the Conversion Date and compliance by the applicable Holder with the relevant procedures contained inSection 8(a) (and in any event no later than three (3) Trading Days thereafter), the Company shall issue the number of whole shares of Common Stock issuable upon conversion (and deliver payment of cash in lieu of fractional shares as set out inSection 11(i)) and, to the extent applicable, any cash, securities or other property issuable thereon. Such delivery of shares of Common Stock, securities or other property shall be made, at the option of the Company, in certificated form or by book-entry. Any such certificate or certificates shall be delivered by the Company to the appropriate Holder on a book-entry basis or by mailing certificates evidencing the shares to the Holders at their respective addresses as set forth in the Conversion Notice (in the case of a conversion pursuant toSection 6(a)) or in the records of the Company (in the case of a Mandatory Conversion). In the event that a Holder shall not by written notice designate the name in which shares of Common Stock (and payments of cash in lieu of fractional shares) and, to the extent applicable, cash, securities or other property to be delivered upon conversion of shares of Series A Preferred Stock should be registered or paid, or the manner in which such shares, cash, securities or other property should be delivered, the Company shall be entitled to register and deliver such shares, securities or other property, and make such payment, in the name of the Holder and in the manner shown on the records of the Company. (d) Status of Converted or Reacquired Shares. Shares of Series A Preferred Stock converted in accordance with these Articles Supplementary, or otherwise acquired by the Company in any manner whatsoever, shall return to the status of and constitute authorized but unissued shares of Preferred Stock, without classification as to series until such shares are once more classified as a particular series by the Board pursuant to the provisions of the Charter. SECTION 9. Change of Control. (a) Repurchase at the Option of theHolder. Upon the occurrence of a Change of Control, each Holder of outstanding shares of Series A Preferred Stock shall have the option to require the Company to purchase (a “Change of Control Put”) any or all of its shares of Series A Preferred Stock at a purchase price per share of Series A Preferred Stock, payable in cash (in the case of clause (i)) or the applicable consideration (in the case of clause (ii)), equal to the greater of (i) the Liquidation Preference of such share of Series A Preferred Stock plus the Accrued Dividends in respect of such share of Series A Preferred Stock, in each case as of the applicable Change of Control Purchase Date and (ii) the amount of cash and/or other assets such Holder would have received had such Holder, immediately prior to such Change of Control, converted such share of Series A Preferred Stock into Common Stock (pursuant toSection 6 without regard to any of the limitations on convertibility contained therein) (the “Change of Control Purchase Price”);provided that, in each case (but, for purposes of clarity, not in the event where such holder actually converts its shares of Series A Preferred Stock into Common Stock), the Company shall only be required to pay the Change of Control Purchase Price after (i) the Satisfaction of the Indebtedness Obligations and to the extent permitted by the Specified Contract Terms and (ii) to the extent such purchase can be made out of funds legally available therefor. (b) Initial Change of Control Notice. On or before the twentieth (20th) Business Day prior to the date on which the Company anticipates consummating a Change of Control (or, if later, promptly after the Company discovers that a Change of Control may occur), a written notice shall be sent by or on behalf of the Company to the Holders as they appear in the records of the Company, which notice shall contain the date on which the Change of Control is anticipated to be effected (or, if applicable, the date on which a Schedule TO or other schedule, form or report disclosing a Change of Control was filed). (c) Final Change of Control Notice. Within 10 days following the effective date of the Change of Control (the “Change of Control Effective Date”) (or if the Company discovers later than such date that a Change of Control has occurred, promptly following the date of such discovery), a final written notice shall be sent by or on behalf of the Company to the Holders as they appear in the records of the Company, which notice shall contain: (i) the date by which the Holder must elect to exercise a Change of Control Put (which shall be no earlier than 30 days before the purchase date) (the “Change of Control Put Deadline”); (ii) the amount of cash and/or other consideration payable per share of Series A Preferred Stock, if such Holder elects to exercise a Change of Control Put; (iii) a description of the payments and other actions required to be made or taken in order to effect the Satisfaction of the Indebtedness Obligations; (iv) the purchase date for such shares (which shall be the later of (A) 61 days from the date such notice is mailed or (B) the day the Satisfaction of Indebtedness Obligations has occurred); and (v) the instructions a Holder must follow to exercise a Change of Control Put in connection with such Change of Control. (d) Change of Control Put Procedure. To exercise a Change of Control Put, a Holder must, no later than 5:00 p.m., New York City time, on the Change of Control Put Deadline, surrender to the Conversion Agent the certificates representing the shares of Series A Preferred Stock to be repurchased by the Company or lost stock affidavits therefor. (e) Delivery upon Change of Control Put. Upon a Change of Control Put, after the Satisfaction of the Indebtedness Obligations and subject toSection 9(i) below, the Company (or its successor) shall deliver or cause to be delivered to the Holder by mail or wire transfer the Change of Control Purchase Price of such Holder’s shares of Series A Preferred Stock. (f) Treatment of Shares. If a Holder does not elect to effect a Change of Control Put pursuant to thisSection 9 with respect to all of its shares of Series A Preferred Stock, the shares of Series A Preferred Stock held by it and not surrendered for purchase by the Company will remain outstanding until otherwise subsequently converted, redeemed, reclassified or canceled in accordance with the terms of these Articles Supplementary. From and after the Change of Control Purchase Date with respect to any share of Series A Preferred Stock for which a Holder elected to effect a Change of Control Put and that the Company has repurchased in accordance with the provisions of thisSection 9, (i) Dividends shall cease to accrue on such share, (ii) such share shall no longer be deemed outstanding and (iii) all rights with respect to such share shall cease and terminate. For the avoidance of doubt, notwithstanding anything contained herein to the contrary, until a share of Series A Preferred Stock is purchased by the payment in full of the applicable Change of Control Purchase Price, such share of Series A Preferred Stock will remain outstanding and will be entitled to all of the powers, designations, preferences and other rights provided herein, including that such share (x) may be converted pursuant toSection 6 and, if not so converted, (y) shall (A) accrue Dividends and (B) entitle the Holder thereof to the voting rights provided inSection 13; provided that any such shares that are converted prior to or on the Change of Control Purchase Date in accordance with these Articles Supplementary shall not be entitled to receive any payment of the Change of Control Purchase Price. (g) Partial Exercise of Change of Control Put. In the event that a Change of Control Put is effected with respect to shares of Series A Preferred Stock representing less than all the shares of Series A Preferred Stock held by a Holder, upon such Change of Control Put, the Company shall execute and the Transfer Agent shall countersign and deliver to such Holder, at the expense of the Company, a certificate evidencing the shares of Series A Preferred Stock held by the Holder as to which a Change of Control Put was not effected (or book-entry interests representing such shares). (h) Redemption by the Company. In the case of a Change of Control (other than pursuant to clause (ii)(c) of the definition of such term) (provided that for purposes of thisSection 9(h), the references to “a majority” in the definition of Change of Control shall be deemed to be references to “80%”), any shares of Series A Preferred Stock as to which a Change of Control Put was not exercised may be redeemed, at the option of the Company (or its successor or the acquiring or surviving Person in such Change of Control), upon not less than thirty (30) nor more than sixty (60) days’ notice, which notice must be received by the affected Holders within thirty (30) days of the Change of Control Put Deadline, at a redemption price per share, payable in cash (in the case of clause (i)) or the applicable consideration (in the case of clause (ii)), equal to the greater of (i) (x) the Liquidation Preference as of the date of redemption plus (y) Accrued Dividends as of the date of redemption, plus (z) if the applicable redemption date is prior to the fifth anniversary of the first Dividend Payment Date, the amount equal to the net present value (computed using a discount rate of 10%) of the sum of all Dividends that would otherwise be payable on such share of Series A Preferred Stock on and after the applicable redemption date to and including the fifth anniversary of the first Dividend Payment Date and assuming the Company chose to pay such Dividends in cash and (ii) the amount of cash and/or other assets a Holder would have received had such Holder, immediately prior to such Change of Control, converted such share of Series A Preferred Stock into Common Stock (pursuant toSection 6 without regard to any of the limitations on convertibility contained therein). Unless the Company (or its successor or the acquiring or surviving Person in such Change of Control) defaults in making the redemption payment on the applicable redemption date, on and after the redemption date, (A) Dividends shall cease to accrue on the shares of Series A Preferred Stock so called for redemption, (B) all shares of Series A Preferred Stock called for redemption shall no longer be deemed outstanding and (C) all rights with respect to such shares of Series A Preferred Stock shall on such redemption date cease and terminate, except only the right of the Holders thereof to receive the amount payable in such redemption. (i) Specified Contract Terms. If the Company (A) shall not have sufficient funds legally available under the MGCL to purchase all shares of Series A Preferred Stock that Holders have requested to be purchased underSection 9(a) (the “Required Number of Shares”) or (B) will be in violation of Specified Contract Terms if it purchases the Required Number of Shares, the Company shall (i) purchase, pro rata among the Holders that have requested their shares be purchased pursuant toSection 9(a), a number of shares of Series A Preferred Stock with an aggregate Change of Control Purchase Price equal to the lesser of (1) the amount legally available for the purchase of shares of Series A Preferred Stock under the MGCL and (2) the largest amount that can be used for such purchase not prohibited by Specified Contract Terms and (ii) purchase any shares of Series A Preferred Stock not purchased because of the foregoing limitations at the applicable Change of Control Purchase Price as soon as practicable after the Company is able to make such purchase out of assets legally available for the purchase of such share of Series A Preferred Stock and without violation of Specified Contract Terms. The inability of the Company (or its successor) to make a purchase payment for any reason shall not relieve the Company (or its successor) from its obligation to effect any required purchase when, as and if permitted by applicable law and Specified Contract Terms. If the Company fails to pay the Change of Control Purchase Price in full when due in accordance with thisSection 9 in respect of some or all of the shares or Series A Preferred Shares to be repurchased pursuant to the Change of Control Put, the Company will pay Dividends on such shares not repurchased at a Dividend Rate equal to 8.0% per annum, accruing daily from such date until the Change of Control Purchase Price, plus all Accrued Dividends thereon, are paid in full in respect of such shares of Series A Preferred Stock. Notwithstanding the foregoing, in the event a Holder elects to exercise a Change of Control Put pursuant to thisSection 9 at a time when the Company is restricted or prohibited (contractually or otherwise) from redeeming some or all of the Series A Preferred Stock subject to the Change of Control Put, the Company will use its commercially reasonable efforts to obtain the requisite consents to remove or obtain an exception or waiver to such restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to comply with its obligations under thisSection 9. (j) Change of Control Agreements. The Company shall not enter into any agreement for a transaction constituting a Change of Control unless (i) such agreement provides for or does not interfere with or prevent (as applicable) the exercise by the Holders of their Change of Control Put in an manner that is consistent with and gives effect to thisSection 9, and (ii) the acquiring or surviving Person in such Change of Control represents or covenants, in form and substance reasonably satisfactory to the Board acting in good faith, that at the closing of such Change of Control that such Person shall have sufficient funds (which may include, without limitation, cash and cash equivalents on the Company’s balance sheet, the proceeds of any debt or equity financing, available lines of credit or uncalled capital commitments) to consummate such Change of Control and effect the Satisfaction of the Indebtedness Obligations and the payment of the Change of Control Put Price in respect of shares of Series A Preferred Stock that have not been converted into Common Stock prior to the Change of Control Effective Date pursuant toSection 6 or7, as applicable. SECTION 10. Redemption at the Option of the Holder. (a) On each Designated Redemption Date, each Holder of shares of Series A Preferred Stock shall have the right (a “Redemption Right”) to require the Company to redeem any or all of the shares of Series A Preferred Stock of such Holder outstanding on such Designated Redemption Date, in each case to the extent not prohibited by law, at a redemption price, in cash, equal to the sum of (i) the Liquidation Preference of the shares of Series A Preferred Stock to be redeemed plus (ii) the Accrued Dividends with respect to such shares of Series A Preferred Stock as of the applicable Redemption Date (such price, the “Redemption Price”). (b) To exercise its Redemption Right pursuant to thisSection 10 in respect of any Designated Redemption Date, a Holder must, no later than 5:00 p.m., New York City time, on the date that is 120 days prior to the Designated Redemption Date, deliver written notice thereof (a “Notice of Redemption”) to the Company and the Transfer Agent and surrender to the Transfer Agent the certificates representing the shares of Series A Preferred Stock to be redeemed by the Company. On each Designated Redemption Date, the Company shall deliver or cause to be delivered to each Holder that has exercised its Redemption Right with respect to such Designated Redemption Date, by mail or wire transfer, the Redemption Price of the shares of Series A Preferred Stock in respect of which such Holder has delivered a Notice of Redemption in accordance herewith. (c) If a Holder does not elect to exercise its Redemption Right pursuant to thisSection 10 with respect to all of its shares of Series A Preferred Stock, the shares of Series A Preferred Stock held by it and not surrendered for redemption by the Company will remain outstanding until otherwise subsequently converted, redeemed, reclassified or canceled. From and after the Redemption Date with respect to any share of Series A Preferred Stock for which a Holder elected to effect a Redemption Right and the Company has redeemed in accordance with the provisions of thisSection 10, (i) Dividends shall cease to accrue on such share, (ii) such share shall no longer be deemed outstanding and (iii) all rights with respect to such share shall cease and terminate. For the avoidance of doubt, notwithstanding anything contained herein to the contrary, until a share of Series A Preferred Stock is redeemed by the payment in cash in full of the applicable Redemption Price, such share of Series A Preferred Stock will remain outstanding and will be entitled to all of the powers, designations, preferences and other rights provided herein. (d) In the event that a Redemption Right is exercised with respect to shares of Series A Preferred Stock representing less than all the shares of Series A Preferred Stock held by a Holder, upon such redemption, the Company shall execute and the Transfer Agent shall countersign and deliver to such Holder, at the expense of the Company, a certificate representing the shares of Series A Preferred Stock held by the Holder as to which a Redemption Right was not exercised (or book-entry interests representing such shares). (e) If the Company shall not have sufficient funds legally available under the MGCL to redeem, as of any Designated Redemption Date, all shares of Series A Preferred Stock with respect to which Holders have exercised a Redemption Right pursuant to thisSection 10, the Company shall redeem on such Designated Redemption Date, pro rata among the Holders that have exercised their Redemption Right, a number of shares of Series A Preferred Stock with an aggregate Redemption Price equal to the amount legally available for the redemption of shares of Series A Preferred Stock under the MGCL on such Designated Redemption Date. At such time, as soon as practicable thereafter, that the Company has sufficient funds legally available under the MGCL to redeem such shares of Series A Preferred Stock not redeemed because of the foregoing limitation at the applicable Redemption Price, the Company shall provide notice to the Holders of the availability of such funds and the Holders at that time may elect to invoke their Redemption Right pursuant to and in accordance with the provisions of thisSection10. In addition, if the Company does not make the redemption payment as of any Designated Redemption Date relating to all of the shares of Series A Preferred Stock with respect to which Holders have exercised a Redemption Right pursuant to thisSection 10, the Company will pay Dividends on such shares not redeemed at a Dividend Rate equal to 8.0% per annum, accruing daily from the Designated Redemption Date until the Redemption Price, plus all Accrued Dividends thereon, are paid in full in respect of such shares of Series A Preferred Stock. The inability of the Company to make a redemption payment for any reason shall not relieve the Company from its obligation to effect any required redemption when, as and if permitted by applicable law. SECTION 11. Anti-Dilution Adjustments. (a) Adjustments. The Conversion Rate will be subject to adjustment, without duplication, upon the occurrence of the following events, except that the Company shall not make any adjustment to the Conversion Rate if Holders of the Series A Preferred Stock participate, at the same time and upon the same terms as holders of Common Stock and solely as a result of holding shares of Series A Preferred Stock, in any transaction described in thisSection 11(b), without having to convert their Series A Preferred Stock, as if they held a number of shares of Common Stock equal to the Conversion Rate multiplied by the number of shares of Series A Preferred Stock held by such Holders: (i) The issuance of Common Stock as a dividend or distribution to all or substantially all holders of Common Stock, or a subdivision or combination of Common Stock or a reclassification of Common Stock into a greater or lesser number of shares of Common Stock, in which event the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x (OS1 / OS0) CR0 = the Conversion Rate in effect immediately prior to the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification CR1 = the new Conversion Rate in effect immediately after the close of business on (i) the Record Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on (i) the Record Date for such dividend or distribution or (ii) the effective date of such subdivision, combination or reclassification OS1 = the number of shares of Common Stock that would be outstanding immediately after, and solely as a result of, the completion of such event Any adjustment made pursuant to this clause (i) shall be effective immediately after the close of business on the Record Date for such dividend or distribution, or the effective date of such subdivision, combination or reclassification. If any such event is announced or declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such event shall not occur, to the Conversion Rate that would then be in effect if such event had not been declared. (ii) The dividend, distribution or other issuance to all or substantially all holders of Common Stock of rights (other than rights, options or warrants distributed in connection with a stockholder rights plan (in which event the provisions ofSection 11(a)(vii) shall apply), options or warrants entitling them to subscribe for or purchase shares of Common Stock for a period expiring forty-five (45) days or less from the date of issuance thereof, at a price per share that is less than the Current Market Price as of the Record Date for such issuance, in which event the Conversion Rate will be increased based on the following formula: CR1 = CR0 x [(OS0+X))] / (OS0+Y) CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend, distribution or issuance CR1 = the new Conversion Rate in effect immediately following the close of business on the Record Date for such dividend, distribution or issuance OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Record Date for such dividend, distribution or issuance X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the Current Market Price as of the Record Date for such dividend, distribution or issuance. For purposes of this clause (ii), in determining whether any rights, options or warrants entitle the holders to purchase the Common Stock at a price per share that is less than the Current Market Price as of the Record Date for such dividend, distribution or issuance, there shall be taken into account any consideration the Company receives for such rights, options or warrants, and any amount payable on exercise thereof, with the value of such consideration, if other than cash, to be the Fair Market Value thereof. Any adjustment made pursuant to this clause (ii) shall become effective immediately following the close of business on the Record Date for such dividend, distribution or issuance. In the event that such rights, options or warrants are not so issued, the Conversion Rate shall be readjusted, effective as of the date the Board publicly announces its decision not to issue such rights, options or warrants, to the Conversion Rate that would then be in effect if such dividend, distribution or issuance had not been declared. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights, options or warrants upon the exercise of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the dividend, distribution or issuance of such rights, options or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered. (iii) The Company or one or more of its Subsidiaries purchases Common Stock pursuant to a tender offer or exchange offer (other than an exchange offer that constitutes a Distribution Transaction subject toSection 11(a)(v)) by the Company or a Subsidiary of the Company for all or any portion of the Common Stock, or otherwise acquires Common Stock (except in an open market purchase in compliance with Rule10b-18 promulgated under the Exchange Act or through an “accelerated share repurchase” on customary terms) (a “Covered Repurchase”), if the cash and value of any other consideration included in the payment per share of Common Stock validly tendered, exchanged or otherwise acquired through a Covered Repurchase exceeds the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next succeeding the last day on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended) or shares of Common Stock are otherwise acquired through a Covered Repurchase (the “Expiration Date”), in which event the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x [(FMV + (SP1 x OS1))] / (SP1 x OS0) CR0 = the Conversion Rate in effect immediately prior to the close of business on the Expiration Date CR1 = the new Conversion Rate in effect immediately after the close of business on the Expiration Date FMV = the Fair Market Value, on the Expiration Date, of all cash and any other consideration paid or payable for all shares validly tendered or exchanged and not withdrawn, or otherwise acquired through a Covered Repurchase, as of the Expiration Date OS0 = the number of shares of Common Stock outstanding immediately prior to the last time tenders or exchanges may be made pursuant to such tender or exchange offer (including the shares to be purchased in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase OS1 = the number of shares of Common Stock outstanding immediately after the last time tenders or exchanges may be made pursuant to such tender or exchange offer (after giving effect to the purchase of shares in such tender or exchange offer) or shares are otherwise acquired through a Covered Repurchase SP1 = the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the Trading Day next succeeding the Expiration Date Such adjustment shall become effective immediately after the close of business on the Expiration Date. If an adjustment to the Conversion Rate is required under thisSection 11(a)(iii), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under thisSection 11(a)(iii) shall be delayed to the extent necessary in order to complete the calculations provided for in thisSection 11(a)(iii). In the event that the Company or any of its Subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer, exchange offer or other commitment to acquire shares of Common Stock through a Covered Repurchase but is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Rate shall be readjusted to be the Conversion Rate that would have been then in effect if such tender offer, exchange offer or Covered Repurchase had not been made. Notwithstanding anything to the contrary set forth herein, no adjustment to the Conversion Rate shall be made pursuant to thisSection 11(a)(iii) as a result of purchases of shares of Common Stock by the Company in an amount not to exceed $1,000,000,000 to be consummated within 9 months following the Original Issuance Date. (iv) The Company shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock (other than for cash in lieu of fractional shares), shares of any class of its Capital Stock, evidences of its indebtedness, assets, other property or securities, but excluding (A) dividends or distributions referred to in Section 11(a)(i) orSection 11(a)(ii) hereof, (B) Distribution Transactions as to which Section 11(a)(v) shall apply, (C) dividends or distributions paid exclusively in cash as to whichSection 11(a)(vi) shall apply and (D) rights, options or warrants distributed in connection with a stockholder rights plan as to whichSection 11(a)(vii) shall apply (any of such shares of its Capital Stock, indebtedness, assets or property that are not so excluded are hereinafter called the “Distributed Property”), then, in each such case the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x [SP0 / (SP0 - FMV)] CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution CR1 = the new Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution SP0 = the Current Market Price as of the Record Date for such dividend or distribution FMV = the Fair Market Value of the portion of Distributed Property distributed with respect to each outstanding share of Common Stock on the Record Date for such dividend or distribution; provided that, if FMV is equal or greater than SP0, then in lieu of the foregoing adjustment, the Company shall distribute to each holder of Series A Preferred Stock on the date the applicable Distributed Property is distributed to holders of Common Stock, but without requiring such holder to convert its shares of Series A Preferred Stock, in respect of each share of Series A Preferred Stock held by such holder, the amount of Distributed Property such holder would have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such dividend or distribution Any adjustment made pursuant to this clause (iv) shall be effective immediately after the close of business on the Record Date for such dividend or distribution. If any such dividend or distribution is declared but does not occur, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such dividend or distribution shall not occur, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. (v) The Company effects a Distribution Transaction, in which case the Conversion Rate in effect immediately prior to the effective date of the Distribution Transaction shall be adjusted based on the following formula: CR1 = CR0 x [(FMV + MP0) / MP0] CR0 = the Conversion Rate in effect immediately prior to the close of business on the effective date of the Distribution Transaction CR1 = the new Conversion Rate in effect immediately after the close of business on the effective date of the Distribution Transaction FMV = the arithmetic average of the volume-weighted average prices for a share of the capital stock or other interest distributed to holders of Common Stock on the principal United States securities exchange or automated quotation system on which such capital stock or other interest trades, as reported by Bloomberg (or, if Bloomberg ceases to publish such price, any successor service chosen by the Company) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of such capital stock or other interest on such Trading Day determined, using a volume-weighted average method, by an Independent Financial Advisor retained for such purpose by the Company), for each of the ten consecutive full Trading Days commencing with, and including, the effective date of the Distribution Transaction MP0 = the arithmetic average of the VWAP per share of Common Stock for each of the ten (10) consecutive full Trading Days commencing on, and including, the effective date of the Distribution Transaction Such adjustment shall become effective immediately following the close of business on the effective date of the Distribution Transaction. If an adjustment to the Conversion Rate is required under thisSection 11(a)(v), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under thisSection 11(a)(v) shall be delayed to the extent necessary in order to complete the calculations provided for in thisSection 11(a)(v). (vi) The Company makes a cash dividend or distribution to all or substantially all holders of the Common Stock, the Conversion Rate shall be adjusted based on the following formula: CR1 = CR0 x [SP0 / (SP0 – C)] CR0 = the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution CR1 = the new Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution SP0 = the Current Market Price as of the Record Date for such dividend or distribution C = the amount in cash per share of Common Stock the Company distributes to all or substantially all holders of its Common Stock;provided that, if C is equal or greater than SP0, then in lieu of the foregoing adjustment, the Company shall pay to each holder of Series A Preferred Stock on the date the applicable cash dividend or distribution is made to holders of Common Stock, but without requiring such holder to convert its shares of Series A Preferred Stock, in respect of each share of Series A Preferred Stock held by such holder, the amount of cash such holder would have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such dividend or distribution Any adjustment made pursuant to this clause (vi) shall be effective immediately after the close of business on the Record Date for such dividend or distribution. If any dividend or distribution is declared but not paid, the Conversion Rate shall be readjusted, effective as of the date the Board announces that such dividend or distribution will not be paid, to the Conversion Rate that would then be in effect if such had dividend or distribution not been declared. (vii) If the Company has a stockholder rights plan in effect with respect to the Common Stock on any Conversion Date, upon conversion of any shares of the Series A Preferred Stock, Holders of such shares will receive, in addition to the applicable number of shares of Common Stock, the rights under such rights plan relating to such Common Stock, unless, prior to such Conversion Date, the rights have (i) become exercisable or (ii) separated from the shares of Common Stock (the first of such events to occur, a “Trigger Event”), in which case, the Conversion Rate will be adjusted, effective automatically at the time of such Trigger Event, as if the Company had made a distribution of such rights to all holders of the Company Common Stock as described in Section 11(a)(ii) (without giving effect to the forty-five (45) day limit on the exercisability of rights, options or warrants ordinarily subject to suchSection 11(a)(ii)), subject to appropriate readjustment in the event of the expiration, termination or redemption of such rights prior to the exercise, deemed exercise or exchange thereof. Notwithstanding the foregoing, to the extent any such stockholder rights are exchanged by the Company for shares of Common Stock or other property or securities, the Conversion Rate shall be appropriately readjusted as if such stockholder rights had not been issued, but the Company had instead issued such shares of Common Stock or other property or securities as a dividend or distribution of shares of Common Stock pursuant toSection 11(a)(i) orSection 11(a)(iv), as applicable. To the extent that such rights are not exercised prior to their expiration, termination or redemption, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the occurrence of the Trigger Event been made on the basis of the issuance of, and the receipt of the exercise price with respect to, only the number of shares of Common Stock actually issued pursuant to such rights. Notwithstanding anything to the contrary in thisSection 11(a)(vii), no adjustment shall be required to be made to the Conversion Rate with respect to any Holder which is, or is an “affiliate” or “associate” of, an “acquiring person” under such stockholder rights plan or with respect to any direct or indirect transferee of such Holder who receives Series A Preferred Stock in such transfer after the time such Holder becomes, or its affiliate or associate becomes, such an “acquiring person”. (b) Calculation of Adjustments. All adjustments to the Conversion Rate shall be calculated by the Company to the nearest 1/10,000th of one share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment to the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent of the Conversion Rate;provided,however, that any such adjustment that is not required to be made will be carried forward and taken into account in any subsequent adjustment; provided,further that any such adjustment of less than one percent that has not been made will be made upon any Conversion Date. (c) When No Adjustment Required. (3) Except as otherwise provided in thisSection 11, the Conversion Rate will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing, or for the repurchase of Common Stock. (ii) Except as otherwise provided in thisSection 11, the Conversion Rate will not be adjusted as a result of the issuance of, the distribution of separate certificates representing, the exercise or redemption of, or the termination or invalidation of, rights pursuant to any stockholder rights plans. (iii) No adjustment to the Conversion Rate will be made: (A) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in Common Stock under any plan in which purchases are made at market prices on the date or dates of purchase, without discount, and whether or not the Company bears the ordinary costs of administration and operation of the plan, including brokerage commissions; (B) upon the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs; (C) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security; or (D) for a change in the par value of the Common Stock. (d) Successive Adjustments. After an adjustment to the Conversion Rate under thisSection 11, any subsequent event requiring an adjustment under this Section 11 shall cause an adjustment to each such Conversion Rate as so adjusted. (e) Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Conversion Rate pursuant to thisSection 11 under more than one subsection hereof, such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder; provided,however, that if more than one subsection of thisSection 11 is applicable to a single event, the subsection shall be applied that produces the largest adjustment. (f)Reserved. (g) Notice of Adjustments. Whenever the Conversion Rate is adjusted as provided under thisSection 11, the Company shall as soon as reasonably practicable following the occurrence of an event that requires such adjustment (or if the Company is not aware of such occurrence, as soon as reasonably practicable after becoming so aware): (i) compute the adjusted applicable Conversion Rate in accordance with this Section 11 and prepare and transmit to the Conversion Agent an Officer’s Certificate setting forth the applicable Conversion Rate, the method of calculation thereof, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) provide a written notice to the Holders of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the applicable Conversion Rate was determined and setting forth the adjusted applicable Conversion Rate. (h) Conversion Agent. The Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist that may require any adjustment of the Conversion Rate or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Conversion Agent shall be fully authorized and protected in relying on any Officer’s Certificate delivered pursuant to thisSection 11(h) and any adjustment contained therein and the Conversion Agent shall not be deemed to have knowledge of any adjustment unless and until it has received such certificate. The Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, that may at the time be issued or delivered with respect to any Series A Preferred Stock and the Conversion Agent makes no representation with respect thereto. The Conversion Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to the conversion of Series A Preferred Stock or to comply with any of the duties, responsibilities or covenants of the Company contained in thisSection 11. (i) Fractional Shares. No fractional shares of Common Stock will be delivered to the Holders upon conversion. In lieu of fractional shares otherwise issuable, the Holders will be entitled to receive, at the Company’s sole discretion, either (i) an amount in cash equal to the fraction of a share of Common Stock multiplied by the Closing Price of the Common Stock on the Trading Day immediately preceding the applicable Conversion Date or (ii) one additional whole share of Common Stock. In order to determine whether the number of shares of Common Stock to be delivered to a Holder upon the conversion of such Holder’s shares of Series A Preferred Stock will include a fractional share, such determination shall be based on the aggregate number of shares of Series A Preferred Stock of such Holder that are being converted on any single Conversion Date. SECTION 12. Adjustment for Reorganization Events. (a)Reorganization Events. In the event of: (i) any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Company with or into another Person, in each case, pursuant to which at least a majority of the Common Stock (but not the Series A Preferred Stock) is changed or converted into, or exchanged for, cash, securities or other property of the Company or another Person; (ii) any sale, transfer, lease or conveyance to another Person of all or a majority of the property and assets of the Company, in each case pursuant to which the Common Stock (but not the Series A Preferred Stock) is converted into cash, securities or other property; or (iii) any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition) or reclassification, recapitalization or reorganization of the Common Stock (but not the Series A Preferred Stock) into other securities; (each of which is referred to as a “Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the Holders and subject toSection 12(d), remain outstanding but shall become convertible into, out of funds legally available therefor, the number, kind and amount of securities, cash and other property (the “Exchange Property”) (without any interest on such Exchange Property and without any right to dividends or distribution on such Exchange Property which have a record date that is prior to the applicable Conversion Date) that the Holder of such share of Series A Preferred Stock would have received in such Reorganization Event had such Holder converted its shares of Series A Preferred Stock into the applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event using the Conversion Rate applicable immediately prior to the effective date of the Reorganization Event and the Liquidation Preference applicable at the time of such subsequent conversion; provided that the foregoing shall not apply if such Holder is a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a “Constituent Person”), or an Affiliate of a Constituent Person, to the extent such Reorganization Event provides for different treatment of Common Stock held by such Persons. If the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by a Person (other than a Constituent Person or an Affiliate thereof), then for the purpose of thisSection 12(a), the kind and amount of securities, cash and other property receivable upon conversion following such Reorganization Event will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock. (b) Successive Reorganization Events. The above provisions of this Section 12 shall similarly apply to successive Reorganization Events and the provisions ofSection 11 shall apply to any shares of Capital Stock received by the holders of the Common Stock in any such Reorganization Event. (c) Reorganization Event Notice. The Company (or any successor) shall, no less than thirty (30) days prior to the anticipated effective date of any Reorganization Event, provide written notice to the Holders of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of thisSection 12. (d) Reorganization Event Agreements. The Company shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series A Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to thisSection 12, and (ii) to the extent that the Company is not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for the conversion of the Series A Preferred Stock into stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event. SECTION 13. Voting Rights. (a) General. Except as provided inSection 13(b) andSection 14, Holders of shares of Series A Preferred Stock shall be entitled to vote as a single class with the holders of the Common Stock and the holders of any other class or series of Capital Stock of the Company then entitled to vote with the Common Stock on all matters submitted to a vote of the holders of Common Stock (and, if applicable, holders of any other class or series of Capital Stock of the Company). Each Holder shall be entitled to the number of votes equal to the largest number of whole shares of Common Stock into which all shares of Series A Preferred Stock held of record by such Holder could then be converted pursuant toSection 6 at the record date for the determination of stockholders entitled to vote or consent on such matters or, if no such record date is established, at the date such vote or consent is taken or any written consent of stockholders is first executed. The Holders shall be entitled to notice of any meeting of holders of Common Stock in accordance with the Bylaws of the Company. (b) Adverse Changes. The vote or consent of the Holders of at least a majority of the shares of Series A Preferred Stock outstanding at such time, voting together as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating any of the following actions, whether or not such approval is required pursuant to the MGCL: (i) any amendment, alteration or repeal (whether by merger, consolidation or otherwise) of any provision of the Charter (including these Articles Supplementary) or Bylaws that would have an adverse effect on the rights, preferences, privileges or voting power of the Series A Preferred Stock or the Holder thereof; and (ii) any amendment or alteration (whether by merger, consolidation or otherwise) of, or any supplement (whether by articles supplementary or otherwise) to, the Charter or any provision thereof, or any other action to authorize, create or classify, or increase the number of authorized or issued shares of, or any securities convertible into shares of, or reclassify any security into, or issue, any Parity Stock or Senior Stock or any other class or series of Capital Stock of the Company ranking senior to, or on a parity basis with, the Series A Preferred Stock as to dividend rights or rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company;provided,however, (A) that, with respect to the occurrence of any of the events set forth in clause (i) above, so long as (1) the Series A Preferred Stock remains outstanding with the terms thereof materially unchanged, or (2) the holders of the Series A Preferred Stock receive equity securities with rights, preferences, privileges and voting power substantially the same as those of the Series A Preferred Stock, then the occurrence of such event shall not be deemed to adversely affect such rights, preferences, privileges or voting power of the Series A Preferred Stock, and in such case such holders shall not have any voting rights with respect to the occurrence of any of the events set forth in clause (i) above and (B) that the authorization, creation or classification of, or the increase in the number of authorized or issued shares of, or any securities convertible into shares of, or the reclassification of any security (other than the Series A Preferred Stock) into, or the issuance of, Junior Stock will not require the vote the holders of the Series A Preferred Stock. For purposes of thisSection 13, the filing in accordance with applicable law of articles supplementary or any similar document setting forth or changing the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications or other terms of any class or series of stock of the Company shall be deemed an amendment to the Charter. (c) Each Holder of Series A Preferred Stock will have one vote per share on any matter on which Holders of Series A Preferred Stock are entitled to vote separately as a class, whether at a meeting or by written consent. (d) The vote or consent of the Holders of a majority of the shares of Series A Preferred Stock outstanding at such time, voting together as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be sufficient to waive or amend the provisions ofSection 9(j) of these Articles Supplementary, and any amendment or waiver of any of the provisions of Section 9(j) approved by such percentage of the Holders shall be binding on all of the Holders. (e) For the avoidance of doubt, the Holders of Series A Preferred Stock shall have the exclusive consent and voting rights set forth inSections 13(b) and14 and may take action or consent to any action with respect to such rights without a meeting by delivering a consent in writing or by electronic transmission of the Holders of the Series A Preferred Stock entitled to cast not less than the minimum number of votes that would be necessary to authorize, take or consent to such action at a meeting of stockholders. SECTION 14. Election of Directors. Provided that the Fall-Away of Purchaser Board Rights has not occurred, at each annual meeting of the Company’s stockholders at which the Company has agreed to nominate one or more Purchaser Designee for election to the Board pursuant to and in accordance with the Investment Agreement, the Holders of a majority of the then outstanding shares of Series A Preferred Stock shall have the exclusive right, voting separately as a class, to elect such Purchaser Designee(s) to the Board, irrespective of whether the Company has nominated such Purchaser Designee(s). SECTION 15. Appraisal Rights; Preemptive Rights. Holders of the Series A Preferred Stock shall not be entitled to exercise any rights of an objecting stockholder provided for under Title 3, Subtitle 2 of the MGCL or any successor statute unless the Board, upon the affirmative vote of a majority of the Board and upon such terms and conditions as specified by the Board, shall determine that such rights apply, with respect to the Series A Preferred Stock, to one or more transactions occurring after the date of such determination in connection with which Holders would otherwise be entitled to exercise such rights. Except for the right to participate in any issuance of new equity securities by the Company, as set forth in the Investment Agreement, the Holders shall not have any preemptive rights. SECTION 16. Term. Except as expressly provided in these Articles Supplementary, the shares of Series A Preferred Stock shall not be redeemable or otherwise mature and the term of the Series A Preferred Stock shall be perpetual. SECTION 17. Creation of Capital Stock. Subject toSection 13(b)(ii), the Board, or any duly authorized committee thereof, without the vote of the Holders, may authorize and issue additional shares of Capital Stock of the Company. SECTION 18. No Sinking Fund. Shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund. SECTION 19. Transfer Agent, Conversion Agent, Registrar and PayingAgent. The duly appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the Series A Preferred Stock shall be Wells Fargo Bank, N. A. The Company may, in its sole discretion, appoint any other Person to serve as Transfer Agent, Conversion Agent, Registrar or paying agent for the Series A Preferred Stock and thereafter may remove or replace such other Person at any time. Upon any such appointment or removal, the Company shall send notice thereof by first class mail, postage prepaid, to the Holders. SECTION 20. Replacement Certificates. (a) Mutilated, Destroyed, Stolenand Lost Certificates. If physical certificates evidencing the Series A Preferred Stock are issued, the Company shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Transfer Agent. The Company shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Company and the Transfer Agent of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Transfer Agent and the Company. (b) Certificates Following Conversion. If physical certificates representing the Series A Preferred Stock are issued, the Company shall not be required to issue replacement certificates representing shares of Series A Preferred Stock on or after the Conversion Date applicable to such shares. In place of the delivery of a replacement certificate following the applicable Conversion Date, the Transfer Agent, upon receipt of the satisfactory evidence and indemnity described in clause (a) above, shall deliver the shares of Common Stock issuable upon conversion of such shares of Series A Preferred Stock formerly evidenced by the physical certificate. SECTION 21. Taxes. (a) Transfer Taxes. The Company shall pay any and all stock transfer, documentary, stamp and similar taxes that may be payable in respect of any issuance or delivery of shares of Series A Preferred Stock or shares of Common Stock or other securities issued on account of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Company shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series A Preferred Stock, shares of Common Stock or other securities to a beneficial owner other than the beneficial owner of the of Series A Preferred Stock immediately prior to such conversion, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid or is not payable. (b) Withholding. All payments and distributions (or deemed distributions) on the shares of Series A Preferred Stock (and on the shares of Common Stock received upon their conversion) shall be subject to withholding and backup withholding of taxes to the extent required by law, subject to applicable exemptions, and amounts withheld, if any, shall be treated as received by the Holders. SECTION 22. Notices. All notices referred to herein shall be in writing and, unless otherwise specified herein, all notices hereunder shall be deemed to have been given upon the earlier of receipt thereof or three (3) Business Days after the mailing thereof if sent by registered or certified mail (unless first class mail shall be specifically permitted for such notice under the terms of these Articles Supplementary) with postage prepaid, addressed: (i) if to the Company, to its office at NCR Corporation, 7 World Trade Center, 250 Greenwich Street, New York, NY, 10007 (Attention: General Counsel), (ii) if to any Holder, to such Holder at the address of such Holder as listed in the stock record books of the Company (which may include the records of the Transfer Agent) or (iii) to such other address as the Company or any such Holder, as the case may be, shall have designated by notice similarly given. SECTION 23. Facts Ascertainable. When the terms of these Articles Supplementary refer to a specific agreement or other document to determine the meaning or operation of a provision hereof, the Secretary of the Company shall maintain a copy of such agreement or document at the principal executive offices of the Company and a copy thereof shall be provided free of charge to any Holder who makes a request therefor. The Secretary of the Company shall also maintain a written record of the Issuance Date, the number of shares of Series A Preferred Stock issued to a Holder and the date of each such issuance, and shall furnish such written record free of charge to any Holder who makes a request therefor. SECTION 24. Waiver. Notwithstanding any provision in these Articles Supplementary to the contrary, any provision contained herein and any right of the Holders of Series A Preferred Stock granted hereunder may be waived as to all shares of Series A Preferred Stock (and the Holders thereof) upon the vote or written consent of the Holders of a majority of the shares of Series A Preferred Stock then outstanding. SECTION 25. Severability. If any term of the Series A Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms set forth herein which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein set forth will be deemed dependent upon any other such term unless so expressed herein. Note to Investors This proxy statement and Annual Report contains forward-looking statements. Forward-looking statements use words such as “expect,” “anticipate,” “outlook,” “intend,” “plan,” “believe,” “will,” “should,” “would,” “could” and words of similar meaning. Statements that describe or relate to NCR’s plans, goals, intentions, strategies or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements. The forward-looking statements in this proxy statement and Annual Report include statements regarding NCR’s abilityrevenue growth expectations and investments in strategic growth platforms; NCR’s expected shift to achieverecurring revenue streams; NCR’s spend optimization program in 2019 and its medium-term goals and the contributions of those goals toimpact on operating margins; NCR’s long-term growth;capital allocations for 2019 including internal investments in strategic growth platforms; NCR’s SaaS solutions gaining traction; the progress ofexpectations regarding acquisition activity; NCR’s “Mission One” Services initiative and the expected benefits thereof; the expected contributions of NCR’s new research and development center in Hyderabad, India; NCR’s plans and areas of focus for 2018, including itsto drive growth and create long-term stockholder value; NCR’s plans to accelerate its transformation into asoftware-led solutions company, its plans to expand its leadership position in the omni-channel market,diversify revenue and its expected focus on disruptive innovation, solution developmentstreamline costs; and market-leading Services delivery; NCR’s expectations for continued movement toward cloud-based solutionsregarding ATM production rates and the introduction of a portfolio of omni-channel decision support platform-enabled solutions, accessed via Smart Edge devices and supported with automated, predictive managed services; and NCR’s expectations for launching a suite of industry solutions.ATM revenues. Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of NCR’s control. Forward-looking statements are not guarantees of future performance, and there are a number of important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including those factors relating to: the strength of demand and pricing for ATMs and other financial services hardware and its effect on the results of our businesses and reportable segments; domestic and global economic and credit conditions including, in particular, those resulting from the imposition or threat of protectionist trade policies or import or export tariffs, global and regional market conditions and spending trends in the financial services and retail industries, new comprehensive U.S. tax legislation, modified or new global or regional trade agreements, the determination by the United Kingdom to exit the European Union, uncertainty over further potential changes in Eurozone participation and fluctuations in oil and commodity prices; the transformation of our business model and our abilityshift to sell higher-margin software and services;recurring revenue; our ability to improve execution in our sales and services organizations; our ability to successfully introduce new solutions and compete in the information technology industry; cybersecurity risks and compliance with data privacy and protection requirements; the possibility of disruptions in or problems with our data center hosting facilities; defects or errors in our products; the impact of our indebtedness and its terms on our financial and operating activities; the historical seasonality of our sales; tax rates and new USU.S. tax legislation; foreign currency fluctuations; the success of our restructuring plans and cost reduction initiatives;initiatives, including those in our Hardware segment; manufacturing disruptions;disruptions, including those caused by or related to outsourced manufacturing; the availability and success of acquisitions, divestitures and alliances; our pension strategy and underfunded pension obligation; reliance on third-partythird party suppliers; the impact of the terms of our strategic relationship with Blackstone and our Series A Convertible Preferred Stock; our multinational operations, including in new and emerging markets; collectability difficulties in subcontracting relationships in certain geographical markets; development and protection of intellectual property; workforce turnover and the ability to attract and retain skilled employees; uncertainties or delays associated with the transition of key business leaders; environmental exposures from our historical and ongoing manufacturing and other activities; and uncertainties with regard to regulations, lawsuits, claims, and other matters across various jurisdictions. Additional information concerning these and other factors can be found in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s most recent annual report on Form10-K contained in this proxy statement and Annual Report. Any forward-looking statement speaks only as of the date on which it is made. NCR does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Detach Here 20182019 ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2019 9:00 A.M. RESERVATION REQUEST FORM If you wish to attend the 20182019 Annual Meeting of Stockholders (the “Annual Meeting”) webcast at the offices of Venable LLP (located at 750 E. Pratt Street, Suite 900, Baltimore, MD 21202) please complete the following information and return to Edward Gallagher, SeniorJames M. Bedore, Executive Vice President, General Counsel and Secretary, NCR Corporation, 864 Spring Street NW, Atlanta, GA 30308-1007. Please note that no members of management or the Board of Directors will be in attendance at Venable LLP’s offices. | | | Your name and address: | | | | | | | | | Number of shares of NCR common stock you hold (if applicable): | | | Number of shares of NCR Series A Convertible Preferred Stock you hold (if applicable): | | |
Please note that if you hold your shares through a bank, broker or other nominee ( (i.e.i.e., in street name), you may be able to authorize your proxy by telephone or the Internet as well as by mail. You should follow the instructions you receive from your bank, broker or other nominee to vote these shares. Also, if you hold your shares in street name, you must obtain a proxy executed in your favor from your bank, broker or nominee to be able to vote via the Annual Meeting webcast. If the shares listed above are not registered in your name, identify the name of the registered stockholder belowand include evidence that you beneficially own the shares. | | | Record stockholder: | | | | | | | | (name of your bank, broker, or other nominee) |
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864 SPRING STREET NW ATLANTA, GA 30308 | | Your Internet or telephone authorization authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card. AUTHORIZE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on April 24, 2018.23, 2019 for shares held directly and by 11:59 p.m. Eastern Time on April 18, 2019 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. AUTHORIZE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on April 24, 2018.23, 2019 for shares held directly and by 11:59 p.m. Eastern Time on April 18, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. AUTHORIZE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to NCR Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. VOTE DURING THE MEETING During The Meeting- Go towww.virtualshareholdermeeting.com/NCR2018NCR2019 You may attend the Meeting via webcast and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by NCR in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to authorize your vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. |
| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | |
E37383-P03435-Z71872E59136-P18469-Z74320 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NCR CORPORATION (COMMON STOCK) | | For All | | Withhold All | | For All Except | | | | | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | | | | | | | | | | | | | | | Vote on Directors: | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | 1. Election of Directors | | | | | | | | | | | | | | | | | | | | | | | | | | 01) Richard L. Clemmer
02) Robert P. DeRodes
03) Deborah A. Farrington
04) Kurt P. Kuehn
05) William R. Nuti
06) Matthew A. Thompson
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 01) Richard L. Clemmer 02) Robert P. DeRodes 03) Deborah A. Farrington 04) Michael D. Hayford | | 05) Kurt P. Kuehn 06) Linda Fayne Levinson 07) Frank R. Martire 08) Matthew A. Thompson | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vote on Proposals: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | | | For | | Against | | Abstain | | | | | | | | | | | | 2. To approve, on an advisory basis, compensation of the named executive compensationofficers as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 3. To ratify the appointment of independent registered public accounting firm for the fiscal year ending December 31, 20182019 as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 4. To approve the Directors’ proposal to amend and restate the charter of the Company to eliminate the supermajority provisions as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | NOTE:This meeting will consider such other business as may properly come before the meeting or any postponement or adjournment thereof, and the proxy authorized herein will vote in his discretion on any such matters, provided the holders of common stock are entitled to vote. NOTE:If you attend the meeting and decide to vote by ballot, your ballot will supersede this proxy.Please sign exactly as your name appears on the records of the Company and enter the date on which you sign. If the shares are held jointly, each holder should sign. If signing for a corporation or partnership or as an agent, attorney, guardian or fiduciary, indicate the capacity in which you are signing. | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | | | | | | | Signature (Joint Owners) | | Date | | | | | | | | | | |
Annual Meeting of Stockholders NCR’s 20182019 Annual Meeting of Stockholders will be held at 9:00 a.m. on April 25, 201824, 2019 via a virtual meeting that will be webcast and can be accessed at www.virtualshareholdermeeting.com/NCR2018.NCR2019. Please see your proxy statement for instructions should you wish to attend the virtual meeting. Important Notice Regarding the Availability of Proxy Materials for the 20182019 Annual Meeting: The Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement, and 20172018 Annual Report on Form 10-K, are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E37384-P03435-Z71872E59137-P18469-Z74320
| | | | | | | | | NCR CORPORATION COMMON STOCK Proxy/Voting Instruction Card THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NCR FOR NCR’S 20182019 ANNUAL MEETING OF STOCKHOLDERS AT 9:00 A.M. ON APRIL 25, 201824, 2019 The undersigned stockholder of NCR Corporation, a Maryland corporation (“NCR” or the “Company”), hereby appoints William R. Nuti, Edward GallagherMichael D. Hayford, James M. Bedore and Robert P. Fishman,Andre J. Fernandez, and each of them, as proxies, and with full power of substitution, in each of them, with the powers the undersigned would possess if personally present at NCR’s 20182019 Annual Meeting of Stockholders to be held via a live webcast on April 25, 2018,24, 2019, and at any postponement or adjournment thereof, to vote all shares of common stock of NCR that the undersigned is entitled to vote upon any matter that may properly come before the meeting that shares of common stock may vote upon, including the matters described in the accompanying Proxy Statement and Notice of the 20182019 Annual Meeting of Stockholders. This proxy also provides voting instructions to the trustee of the NCR Savings Plan and to the trustees and administrators of other plans, with regard to shares of NCR common stock the undersigned may hold under such plans for which the undersigned is entitled to vote at said meeting to the extent permitted by such plans and their trustees and administrators. The undersigned hereby acknowledges receipt of the Notice of the 20182019 Annual Meeting of Stockholders and of the accompanying Proxy Statement, the terms of each of which are incorporated by reference, and revokes any proxy heretofore given with respect to such meeting. THE PROXIES OR THE TRUSTEES AND ADMINISTRATORS OF THE PLANS, AS THE CASE MAY BE, WILL VOTE THE SHARES IN ACCORDANCE WITH THE DIRECTIONS ON THIS PROXY CARD. IF YOU DO NOT INDICATE YOUR CHOICES ON THIS CARD, THE PROXIES WILL VOTE THE SHARES “FOR” EACH NOMINEE FOR DIRECTOR FOR WHOM HOLDERS OF SHARES OF COMMON STOCK ARE ENTITLED TO VOTE, “FOR” THE APPROVAL OF THE COMPANY’S COMPENSATION OF THE NAMED EXECUTIVE COMPENSATIONOFFICERS AS DESCRIBED IN THE PROXY MATERIALS, AND “FOR” THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTING FIRM.FIRM, AND “FOR” THE DIRECTORS’ PROPOSAL TO AMEND AND RESTATE THE CHARTER OF THE COMPANY TO ELIMINATE THE SUPERMAJORITY PROVISIONS AS MORE PARTICULARLY DESCRIBED IN THE PROXY MATERIALS. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF THAT THE HOLDER WOULD BE ENTITLED TO VOTE UPON. IF YOU ARE AN NCR SAVINGS PLAN PARTICIPANT OR OTHER PLAN PARTICIPANT ENTITLED TO VOTE AT THE 20182019 ANNUAL MEETING OF STOCKHOLDERS AND DO NOT INDICATE YOUR CHOICES ON THIS CARD, THOSE SHARES WILL BE SO VOTED BY THE TRUSTEES OF SUCH PLANS. (Continued and to be signed on reverse side.) | | |
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864 SPRING STREET NW ATLANTA, GA 30308 | | Your Internet or telephone authorization authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card. AUTHORIZE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on April 24, 2018.23, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. AUTHORIZE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on April 24, 2018.23, 2019. Have your proxy card in hand when you call and follow the instructions. AUTHORIZE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to NCR Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. VOTE DURING THE MEETING During The Meeting- Go towww.virtualshareholdermeeting.com/NCR2018NCR2019 You may attend the Meeting via webcast and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by NCR in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to authorize your vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. |
| | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | |
E37385-P03435-Z71872E59138-P18469-Z74320 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NCR CORPORATION (SERIES A CONVERTIBLE PREFERRED STOCK) | | For All | | Withhold All | | For All Except | | | | | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | | | | | | | | | | | | | | | Vote on Directors: | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | 1. Election of Directors | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | 01) Gregory R. Blank 02) Chinh E. Chu 03) Richard L. Clemmer 03) 04) Robert P. DeRodes
04) 05) Deborah A. Farrington
| | 05)
06) Michael D. Hayford 07) Kurt P. Kuehn 06) William08) Linda Fayne Levinson
09) Frank R. NutiMartire 07)10) Matthew A. Thompson
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vote on Proposals: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | | | For | | Against | | Abstain | | | | | | | | | | | | 2. To approve, on an advisory basis, compensation of the named executive compensationofficers as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 3. To ratify the appointment of independent registered public accounting firm for the fiscal year ending December 31, 20182019 as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 4. To approve the Directors’ proposal to amend and restate the charter of the Company to eliminate the supermajority provisions as more particularly described in the proxy materials. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | NOTE:This meeting will consider such other business as may properly come before the meeting or any postponement or adjournment thereof, and the proxy authorized herein will vote in the discretion on any such matters, provided that the holders of Series A Convertible Preferred Stock are entitled to vote. NOTE:If you attend the meeting and decide to vote by ballot, your ballot will supersede this proxy.Please sign exactly as your name appears on the records of the Company and enter the date on which you sign. If the shares are held jointly, each holder should sign. If signing for a corporation or partnership or as an agent, attorney, guardian or fiduciary, indicate the capacity in which you are signing. | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | | | | | | | Signature (Joint Owners) | | Date | | | | | | | | | | |
Annual Meeting of Stockholders NCR’s 20182019 Annual Meeting of Stockholders will be held at 9:00 a.m. on April 25, 201824, 2019 via a virtual meeting that will be webcast and can be accessed at www.virtualshareholdermeeting.com/NCR2018.NCR2019. Please see your proxy statement for instructions should you wish to attend the virtual meeting. Important Notice Regarding the Availability of Proxy Materials for the 20182019 Annual Meeting: The Notice of 20182019 Annual Meeting of Stockholders and Proxy Statement, and 20172018 Annual Report on Form 10-K, are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
E37386-P03435-Z71872E59139-P18469-Z74320
| | | | | | | | | NCR CORPORATION SERIES A CONVERTIBLE PREFERRED STOCK Proxy/Voting Instruction Card THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NCR FOR NCR’S 20182019 ANNUAL MEETING OF STOCKHOLDERS AT 9:00 AM ON APRIL 25, 201824, 2019 The undersigned stockholder of NCR Corporation, a Maryland corporation (“NCR” or the “Company”), hereby appoints William R. Nuti, Edward GallagherMichael D. Hayford, James M. Bedore and Robert P. Fishman,Andre J. Fernandez, and each of them, as proxies, and with full power of substitution, in each of them, with the powers the undersigned would possess if personally present at NCR’s 20182019 Annual Meeting of Stockholders to be held via a live webcast on April 25, 2018,24, 2019, and at any postponement or adjournment thereof, to vote all shares of Series A Convertible Preferred Stock, that the undersigned is entitled to vote upon any matter that may properly come before the meeting that shares of Series A Convertible Preferred Stock may vote upon, including the matters described in the accompanying Proxy Statement and Notice of the 20182019 Annual Meeting of Stockholders. The undersigned hereby acknowledges receipt of the Notice of the 20182019 Annual Meeting of Stockholders and of the accompanying Proxy Statement, the terms of each of which are incorporated by reference, and revokes any proxy heretofore given with respect to such meeting. THE PROXIES WILL VOTE THE SHARES IN ACCORDANCE WITH THE DIRECTIONS ON THIS PROXY CARD. IF YOU DO NOT INDICATE YOUR CHOICES ON THIS CARD, THE PROXIES WILL VOTE THE SHARES “FOR” EACH NOMINEE FOR DIRECTOR, “FOR” THE APPROVAL OF THE COMPANY’S COMPENSATION OF THE NAMED EXECUTIVE COMPENSATIONOFFICERS AS DESCRIBED IN THE PROXY MATERIALS, AND “FOR” THE RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTING FIRM.FIRM, AND “FOR” THE DIRECTORS’ PROPOSAL TO AMEND AND RESTATE THE CHARTER OF THE COMPANY TO ELIMINATE THE SUPERMAJORITY PROVISIONS AS MORE PARTICULARY DESCRIBED IN THE PROXY MATERIALS. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF THAT THE HOLDER WOULD BE ENTITLED TO VOTE UPON. (Continued and to be signed on reverse side.) | | |
*** Exercise YourRight to Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to Be Held on April 25, 2018.
| | | | | | | | | | | | | NCR CORPORATION
| | | | Meeting Information
| | | | | | Meeting Type:
| | Virtual Annual Meeting
| | | | | | | For holders as of:
| | The close of business on February 26, 2018
| | | | | | | | | Date: April 25, 2018
| | Time: 9:00 a.m.
| | | | | | | | | Location: Virtual Meeting by webcast at
| | | | | | | | | www.virtualshareholdermeeting.com/NCR2018.
| | |
| | | | The company will be hosting the meeting live via the Internet this year. To
attend the meeting via the Internet please visit www.virtualshareholdermeeting.com/NCR2018 and be sure to have available the information that is printed in the box marked by the arrow (located on the following page).
| | |
| | | | | | | 864 SPRING STREET NW
ATLANTA, GA 30308
| | | | You are receiving this communication because you hold shares of common stock in the company named above.
| | | | This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online atwww.proxyvote.com or easily request a paper copy (see reverse side).
|
| | | | We encourage you to access and review all of the important information contained in the proxy materials before voting.
| | | | | | See the reverse side of this notice to obtain proxy materials and voting instructions.
| | | | | | |
— Before You Vote —
How to Access the Proxy Materials
| | | | | | | | | | | | | | | Proxy Materials Available to VIEW or RECEIVE:
| | | | | | | | | NOTICE AND PROXY STATEMENT 2017 ANNUAL REPORT ON FORM 10-K
How to View Online:
Have the information that is printed in the box marked by the arrow (located on the following page) and visit:www.proxyvote.com.
How to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:
1)BY INTERNET: www.proxyvote.com
2)BY TELEPHONE: 1-800-579-1639
3)BY E-MAIL*: sendmaterial@proxyvote.com
* If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow (located on the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before April 11, 2018 to facilitate timely delivery.
| | |
— How To Vote —
Please Choose One of the Following Voting Methods
| | | | | | | | |
| | | | | | Vote By Internet:
Before The Meeting:
Go towww.proxyvote.com.Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions.
During The Meeting:
Go towww.virtualshareholdermeeting.com/NCR2018. Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions.
Vote By Mail:You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.
| | |
The Board of Directors recommends you vote FOR the following:
The Board of Directors recommends you vote FOR the following proposals:
| 2.
| To approve, on an advisory basis, executive compensation as more particularly described in the proxy materials.
|
| 3.
| To ratify the appointment of independent registered public accounting firm for the fiscal year ending December 31, 2018 as more particularly described in the proxy materials.
|
NOTE:This meeting will consider such other business as may properly come before the meeting or any postponement or adjournment thereof, and the proxy authorized by any holder of shares of common stock will vote in his discretion on any such matters, provided that the holders of common stock are entitled to vote.
*** Exercise YourRight to Vote ***
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to Be Held on April 25, 2018.
| | | | | | | | | | | | | NCR CORPORATION
| | | | Meeting Information
| | | | | | Meeting Type:
| | Virtual Annual Meeting
| | | | | | | For holders as of:
| | The close of business on February 26, 2018
| | | | | | | | | Date: April 25, 2018
| | Time: 9:00 a.m.
| | | | | | | | | Location: Virtual Meeting by webcast at
| | | | | | | | | www.virtualshareholdermeeting.com/NCR2018.
| | |
| | | | The company will be hosting the meeting live via the Internet this year. To attend the meeting via the Internet please visit www.virtualshareholdermeeting.com/NCR2018 and be sure to have available the information that is printed in the box marked by the arrow (located on the following page).
| | |
| | | | | | | 864 SPRING STREET NW
ATLANTA, GA 30308
| | | | You are receiving this communication because you hold shares of Series A Convertible Preferred Stock in the company named above.
| | | | This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online atwww.proxyvote.com or easily request a paper copy (see reverse side).
|
| | | | We encourage you to access and review all of the important information contained in the proxy materials before voting.
| | | | | | See the reverse side of this notice to obtain proxy materials and voting instructions.
| | | | | | |
— Before You Vote —
How to Access the Proxy Materials
| | | | | | | | | | | | | | | Proxy Materials Available to VIEW or RECEIVE:
| | | | | | | | | NOTICE AND PROXY STATEMENT 2017 ANNUAL REPORT ON FORM 10-K
How to View Online:
Have the information that is printed in the box marked by the arrow (located on the following page) and visit:www.proxyvote.com.
How to Request and Receive a PAPER or E-MAIL Copy:
If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request:
1)BY INTERNET: www.proxyvote.com
2)BY TELEPHONE: 1-800-579-1639
3)BY E-MAIL*: sendmaterial@proxyvote.com
* If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked by the arrow (located on the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before April 11, 2018 to facilitate timely delivery.
| | |
— How To Vote —
Please Choose One of the Following Voting Methods
| | | | | | | | |
| | | | | | Vote By Internet:
Before The Meeting:
Go towww.proxyvote.com.Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions.
During The Meeting:
Go towww.virtualshareholdermeeting.com/NCR2018. Have the information that is printed in the box marked by the arrow (located on the following page) available and follow the instructions.
Vote By Mail:You can vote by mail by requesting a paper copy of the materials, which will include a proxy card.
| | |
The Board of Directors recommends you vote FOR the following:
The Board of Directors recommends you vote FOR the following proposals:
| 2.
| To approve, on an advisory basis, executive compensation as more particularly described in the proxy materials.
|
| 3.
| To ratify the appointment of independent registered public accounting firm for the fiscal year ending December 31, 2018 as more particularly described in the proxy materials.
|
NOTE:This meeting will consider such other business as may properly come before the meeting or any postponement or adjournment thereof, and the proxy authorized by any holder of Series A Convertible Preferred Stock will vote in his discretion on any such matters, provided that the holders of Series A Convertible Preferred Stock are entitled to vote.
|