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Exhibit 10.32
NATIONAL PROCESSING COMPANY
LONG-TERM INCENTIVE COMPENSATION PLAN
FOR SENIOR OFFICERS
Effective January 1, 1998
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ARTICLE 1. ESTABLISHMENT AND PURPOSE OF PLAN
1.1 ESTABLISHMENT OF THE PLAN. The following are the provisions of the
National Processing Company Long-Term Incentive Compensation Plan for Senior
Officers (herein referred to as the "Plan"), effective as of January 1, 1998,
which is an amendment and restatement of the National City Processing Company
Long-Term Incentive Plan for Senior Officers effective effective January 1, 1995
("Predecessor Plan").
1.2 EFFECTIVENESS. The Plan shall be effective for all purposes with
respect to Plan Cycles commencing on or after January 1, 1998.
1.3 PURPOSE. The purpose of the Plan is to maximize the returns to
stockholders and to promote the long-term profitability and success of the
Corporation by providing an incentive to those key executives of the Corporation
who are primarily responsible for such profitability and success.
1.4 OPERATION OF THE PLAN. The Plan shall be administered by the
Committee. A Plan Cycle of three years will be established each year that the
Plan is in operation.
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ARTICLE 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have
the meanings set forth below, unless otherwise expressly provided. When the
defined meaning is intended, the term is capitalized.
(a) "Active Participant" shall mean an Eligible Employee who is
approved by the Committee for participation in a Plan Cycle of
the Plan. Such approval shall be determined with respect to
each Plan Cycle prior to March 31 of the first year of that
Plan Cycle, and shall be redetermined with respect to each new
Plan Cycle.
(b) "Average Stock Price" shall be determined with respect to each
Plan Cycle for the month of December prior to such Plan Cycle
(the Average Stock Price at the beginning of the Plan Cycle)
and for the last full calendar month of the Plan Cycle (the
Average Stock Price at the end of the Plan Cycle) and shall
mean the arithmetic mean (the average) of the closing prices
of a share of common stock of a company as reported on any
national securities exchange (or by any national quotation
system accepted by the Committee for this purpose) for each of
the trading days (on which such shares were traded) in such
calendar month. If the shares of common stock are not then so
traded or regularly reported, the stock price shall be
determined by such means as the Committee shall determine.
Notwithstanding the foregoing, the Committee may determine
prior to the start of a Plan Cycle that a different set of
time periods are appropriate for measuring performance under
the Plan, and such different time periods may be used to
determine Average Stock Prices at the beginning and the end of
such Plan Cycle.
(c) "Base Salary" shall mean the average annual salary of an
employee during that portion, or all of the Plan Cycle for
which he or she is an Active Participant, exclusive of any
bonuses, incentive pay, special awards, or stock options.
(d) "Board" shall mean the Board of Directors of the Corporation.
(e) "Change in Control" see Section 11.3.
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(f) "Corporation" shall mean National Processing Company.
(g) "Committee" shall be composed of the Chief Executive Officer
of the Corporation, the individual at National City
Corporation who has primary responsibility of monitoring the
activities of the Corporation and the officer in charge of
Corporate Human Resources at National City Corporation.
(h) "Disability" shall mean the inability, by reason of a
medically determinable physical or mental impairment, to
engage in substantial and gainful activity for a continuous
period of 26 weeks or more as determined by the Committee.
(i) "Early Retirement" shall mean retirement at or after age 55
with at least ten years of service with the Employer and/or
National City Corporation prior to Normal Retirement.
(j) "Earnings Award" shall mean the payment earned by a
Participant based on earnings growth as set forth in Section
4.2.
(k) "Effective Date" see Section 11.4.
(l) "Eligible Employee" shall mean an Employee who is employed in
a position meeting the defined eligibility criteria for
participation in the Plan, as set forth in Article 3.
(m) "Employee" shall mean an individual employed by an Employer on
a regular active and full-time salaried basis.
(n) "Employer" shall mean the Corporation or any corporation,
organization or entity controlled by the Corporation.
(o) "Implementation Date" see Section 11.4.
(p) "Inactive Participant" shall mean an individual who was an
Active Participant in the Plan for a Plan Cycle, who is not
currently an Active Participant for a Plan Cycle but who
continues to have an interest under the Plan.
(q) "Normal Retirement" shall mean leaving the employ of the
Employer and National City Corporation at or after the age 62
with at least twenty years of continuous service
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with the Employer and/or National City Corporation or at or
after the age 65 with at least five years of continuous
service with the Employer and/or National City Corporation.
(r) "Participant" shall mean and include all Active Participants
and all Inactive Participants.
(s) "Peer Group" shall mean a group of comparable corporations
used to measure relative performance. Such Peer Group shall be
established by the Committee for each Plan Cycle prior to the
commencement of the Plan Cycle, and shall not thereafter be
changed with respect to such Plan Cycle, provided, however,
that one or more members of a Peer Group shall be dropped
therefrom in the event of the acquisition of the Peer Group
Member, the acquisition of sixty-five percent or more of the
gross assets of the Peer Group Member or the merger of the
Peer Group Member with another company(ies) where the Peer
Group Member is not the surviving corporation.
(t) "Peer Group Award" shall mean the payment earned by a
Participant based on comparison of the Total Shareholder
Return with the Peer Group as set forth in Section 4.1.
(u) "Plan" shall mean this National Processing Company Long-Term
Incentive Compensation Plan for Senior Officers Effective
January 1, 1998.
(v) "Plan Cycle" shall mean a period of three consecutive fiscal
years of the Corporation and shall be referred to by the
fiscal year in which a particular Plan Cycle commences.
(w) "Predecessor Plan" see Section 1.1.
(x) "Subsidiary" see paragraph 11.3(e)
(y) "Total Award" shall mean the payment earned by a Participant
based on the Peer Group Award and the Earnings Award.
(z) "Total Stockholder Return" with respect to a stock shall be
calculated in the following manner:
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(i) Add the Average Stock Price at the end of the Plan
Cycle for such stock to the dividends paid on the
stock during the Plan Cycle (if any), and then
subtract the Average Stock Price at the beginning of
the Plan Cycle for such stock.
(ii) Divide the resulting sum of (i) above by the Average
Stock Price at the beginning of the Plan Cycle for
such stock.
(iii) The result equals Total Stockholder Return with
respect to such stock for the Plan Cycle.
(aa) "Vesting Event" shall mean the earliest to occur of the
following events:
(1) for each Award, the end of the respective Plan Cycle,
(2) the Effective Date of a Change in Control,
(3) the date a Participant is eligible to retire on a
Normal Retirement,
(4) the date a Participant incurs a Disability,
(5) the date of a Participant's death.
Each Participant and Beneficiary with respect to whom a Vesting Event
has occurred shall be 100% vested in his or her benefits or Awards
earned or accrued hereunder as of the date of such Vesting Event,
subject to the forfeiture provisions of Article 10.
(bb) "Voting Stock" see paragraph 11.3(e).
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
any masculine terminology used herein also shall include the feminine, and the
definition of any term in the singular shall include the plural.
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Eligibility for participation in the Plan will be
limited to those senior officers of the Corporation and its subsidiaries who, by
the nature and scope of their positions, are materially responsible for the
management, growth, and overall success of the Corporation, as determined by the
Committee.
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3.2 PARTICIPATION. Participation in the Plan shall be determined by the
Committee with respect to each Plan Cycle prior to the commencement of the Plan
Cycle. The Committee may base its approval upon the recommendation of the
President of the Corporation. The Committee shall classify senior officers for
the purposes of the Plan into the following categories:
Category Persons Included
Category I President of the Corporation
Category II Executive officers of the Corporation and
Executive officers of major subsidiaries
of the Corporation and similar officers
Each Eligible Employee approved for participation shall be notified of
the selection as soon after approval as is practicable and shall become a
Participant upon acceptance by him or her of such selection; provided however,
that after December 31, 1994, no Eligible Employee shall become a Participant in
the Plan with respect to any Plan Cycle after the commencement of such Plan
Cycle.
3.3 PARTICIPANT FOR PART OF A PLAN CYCLE. In the event an Employee is
an Eligible Employee for only a portion of a Plan Cycle (Participation Portion)
such Eligible Employee may, in the Committee's discretion, be a Participant for
such portion of the Plan Cycle but his or her Award will be based upon his or
her Base Salary at the end of such Participation Portion and such Award will
normally be pro-rated to reflect the number of months in the Participation
Portion of the Plan Cycle compared to the number of months in the total Plan
Cycle.
3.4 CATEGORY CHANGES DURING A PLAN CYCLE. In the event a Participant is
promoted or demoted from one Category to another during a Plan Cycle, the
Committee may, in its discretion, (a) continue such Participant in the Category
he or she was in prior to such promotion or demotion, (b) provide for
participation from and after the promotion or demotion to the new Category, or
(c) provide for a combination of (a) and (b).
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In the event of a Plan Cycle for which the Participant's participation
is thus split between two Categories, the Award for such Plan Cycle will
normally be pro-rated to reflect the portions of the Plan Cycle spent in each
Category and each part of the Award will be based upon the Participant's Base
Salary at the end of the appropriate portions of the Plan Cycle.
3.5 NO RIGHT TO PARTICIPATE. No Participant or Employee shall have a
right at any time to be selected for current or future participation in the
Plan.
ARTICLE 4. AWARD DETERMINATION
4.1 PEER GROUP AWARD FOR EACH PLAN CYCLE. Prior to the beginning of the
Plan Cycle the Committee shall establish the threshold award, target award and
maximum award performance levels for the Plan Cycle, against which the Total
Stockholder Return of the Corporation for the Plan Cycle shall be compared to
other members of the Peer Group. The Committee shall also determine the
membership of the Peer Group for the Plan Cycle at such time.
4.2 EARNINGS GROWTH. The target Earnings Award shall be awarded if, in
the sole discretion of the Committee the Corporation has achieved a compound
growth rate in earnings of 10%. The maximum Earnings Award shall be awarded if,
in the sole discretion of the Committee, the Corporation has achieved a compound
growth rate in earnings of 15%. If the compound growth rate in earnings of the
Corporation is greater than 10% but less than 15%. The Committee shall pro-rate
the award. In determining the compound growth rate in earnings of the
Corporation the Committee may make adjustments as it deems appropriate for
acquisitions, divestitures and other one-time events.
4.3 Total AWARD. The amount of Total Award that shall be awarded to a
Participant under this Plan shall be expressed as a percentage of Base Salary.
Such percentage shall be determined on the basis of the attainment, or lack of
attainment, by the Corporation of the threshold, target or maximum performance
for the Peer Group Award and target or maximum performance for the Earnings
Award, as follows:
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Peer Group Award
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Percent of Base Compensation
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Category Threshold Target Maximum
-------- --------- ------ -------
I 6% 12% 24%
II 4% 8% 16%
Earnings Award
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Percent of Base Compensation
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Category Target Maximum
-------- ------ -------
I 18% 36%
II 12% 24%
ARTICLE 5. PAYMENT OF AWARDS
5.1 FORM AND TIMING OF PAYMENT OF AWARDS. Within 90 days after the end
of the Plan Cycle, the Participant's shall be entitled to receive a cash payment
equal to the entire amount of the Participant's Award. Except as otherwise
provided for in Section 6.1, to receive an Award a Participant must be an
Employee on the date on which the Plan Cycle ends. The Committee may terminate a
Participant's Award prior to any Vesting Event.
ARTICLE 6. TERMINATION OF EMPLOYMENT
6.1 TERMINATION OF EMPLOYMENT DUE TO DEATH, DISABILITY OR NORMAL
RETIREMENT. In the event a Participant's employment is terminated during a Plan
Cycle at or after the occurrence of a Vesting Event other than a Change in
Control the Participant shall be eligible to receive a pro-rated Award
reflecting his or her partial participation. This pro-ration shall be determined
by multiplying the Award by a fraction the numerator of which is the number of
full months of
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participation to the date participation ends, and the denominator of which is
36. The Award thus determined shall be payable as soon as practicable following
the end of the Plan Cycle.
6.2 OTHER TERMINATIONS OF EMPLOYMENT. In the event a Participant's
employment is terminated during a Plan Cycle prior to a Vesting Event, the
Participant's participation in such Plan Cycle shall end and the Participant
shall not be entitled to any Award for such Plan Cycle.
ARTICLE 7. RIGHTS OF PARTICIPANTS
7.1 EMPLOYMENT. Nothing in this Plan shall interfere with or limit in
any way the right of the Corporation to terminate a Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ of
the Corporation.
7.2 RESTRICTIONS ON ASSIGNMENTS. The interest of a Participant or his
or her beneficiary under this Plan may not be sold, transferred, assigned, or
encumbered in any manner, either voluntarily or involuntarily, and any attempt
to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be null and void; neither shall the benefits hereunder be liable
for or subject to the debts, contracts, liabilities, engagements, or torts of
any person to whom such benefits or funds are payable, nor shall they be subject
to garnishment, attachment, or other legal or equitable process, nor shall they
be an asset in bankruptcy.
ARTICLE 8. ADMINISTRATION
ADMINISTRATION. The Plan shall be administered by the Committee in
accordance with any administrative guidelines and any rules that may be
established from time to time by the Committee. The procedures, standards and
provisions of this Plan for determining eligibility for and amounts of Awards in
themselves confer no rights, duties or privileges upon Participants nor place
obligations upon either the Committee or the Corporation. Accordingly, the
Committee may, in making such determinations hereunder, deviate from such
procedures and standards in whatever manner that it, in its judgment, deems
appropriate.
The Committee shall have full power and authority to
interpret, construe and administer the Plan and its interpretations and
construction hereof, and actions hereunder,
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including the timing, form, amount or recipient of any payment to be made
hereunder, and its decisions shall be binding and conclusive on all persons for
all purposes.
The Committee may name assistants who may be, but need not be,
members of the Committee. Such assistants shall serve at the pleasure of the
Committee, and shall perform such functions as are provided for herein and such
other functions as may be assigned by the Committee.
No member of the Board, Committee or any assistant shall be
liable to any person for any action taken or omitted in connection with the
interpretation and administration of this Plan unless attributable to his or her
own willful misconduct or lack of good faith.
ARTICLE 9. REQUIREMENTS OF LAW
9.1 LAWS GOVERNING. This Plan shall be construed in accordance with and
governed by the laws of the State of Ohio.
9.2 WITHHOLDING TAXES. The Corporation shall have the right to deduct
from all payments under this Plan any federal, local or state taxes required by
the law to be withheld with respect to such payments.
9.3 PLAN BINDING ON CORPORATION, EMPLOYEES AND THEIR SUCCESSORS. This
Plan shall be binding upon and inure to the benefit of the Corporation, its
successors and assigns and each Participant and his or her beneficiaries, heirs,
executors, administrators and legal representatives.
ARTICLE 10. FORFEITURES
Notwithstanding any provision in this Plan to the contrary excepting
only the provisions of Article 11, in the event the Committee finds
(a) that an Employee or former Employee who has an interest under
this Plan has been discharged by his or her Employer in the
reasonable belief (and such reasonable belief is the reason or one
of the reasons for such discharge) that the Employee or former
Employee did engage in fraud against the Employer or anyone else,
or
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(b) that an Employee or former Employee who has an interest under
this Plan has been convicted of a crime as a result of which it
becomes illegal for his Employer to employ him or her,
then any amounts held under this Plan for the benefit of such Employee or former
Employee or his or her beneficiaries shall be forfeited and no longer payable to
such Employee or former Employee or to any person claiming by or through such
Employee or former Employee.
ARTICLE 11. CHANGE IN CONTROL
11.1 TREATMENT OF AWARDS. In the event of a Change in Control the
Corporation shall pay to each Active Participant on the Implementation Date of
such Change in Control a lump sum cash payment equal to the amount hereinafter
determined. Such payment shall be payable in cash to the Participant within five
business days after the Implementation Date of such Change in Control and shall
be payment in full to each such Participant for such Plan Cycle, each of which
shall be deemed terminated by operation of this Article 11. No further Plan
Cycles shall commence thereafter under this Plan.
11.2 AMOUNT OF PAYMENT. The amount of the payment to be made as a
consequence of a Change in Control shall, with respect to each Plan Cycle, be
equal to the Maximum Award level (without regard to stockholder return during
such abbreviated Plan Cycle) for the Participant for such Plan Cycle multiplied
by a fraction the numerator of which is the number of full months completed from
the commencement of the Plan Cycle to the Implementation Date of the Change in
Control, and the denominator of which is 36.
11.3 DEFINITION OF CHANGE IN CONTROL. Change in Control shall mean the
occurrence of any of the following events:
(a) The Company is merged, consolidated or reorganized into or
with another corporation or other legal person other than NCC, a
successor of NCC (direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) ("Successor"), or an
affiliate of NCC or of a Successor and as a result of such merger,
consolidation or reorganization less than fifty percent of the combined
voting power of the
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then-outstanding securities of such resulting corporation or person
immediately after such transaction are held by NCC, a Successor or an
affiliate of NCC or of a Successor; or
(b) The Company sells or otherwise transfers all or substantially
all of its assets to another corporation or other legal person, and as
a result of such sale or transfer less than fifty percent of the
combined voting power of the then-outstanding Voting Stock of such
corporation or person immediately after such sale or transfer is held
by NCC, a Successor or an affiliate of NCC or of a Successor, provided,
however, that a Change in Control of NCC determined by the standards
set forth herein or otherwise shall not constitute a Change in Control
of the Company.
11.4 EFFECTIVE DATE OF CHANGE IN CONTROL. Notwithstanding the
foregoing, in the event a Change in Control ultimately results from discussions
or negotiations involving the Corporation or any of its officers or directors,
the "Effective Date" of such Change in Control shall be the date such
discussions or negotiations commenced; otherwise, such Effective Date or Change
in Control shall be the Implementation Date of such Change in Control.
11.5 IMPLEMENTATION DATE OF CHANGE IN CONTROL. The "Implementation
Date" shall be the earliest to occur of the events specified in subsections (a)
or (b) of Section 11.3. As used herein, the Implementation Date of Change in
Control shall be the last date of all current Plan Cycles.
11.6 EFFECT OF CHANGE IN CONTROL, In addition to other vesting under
the Plan, the opportunity of a Participant to participate to the end of all
current Plan Cycles is vested in such Participant in the event of a Change in
Control, as of the Effective Date of and such Change in Control.
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ARTICLE 12. MISCELLANEOUS
In the event of the liquidation of the Corporation the Committee may
make any provisions for holding, handling and distributing the amounts standing
to the credit of the Participants or beneficiaries hereunder which, in the
discretion of the Committee, are appropriate and equitable under all
circumstances and which are consistent with the spirit and purposes of these
provisions.
ARTICLE 13. AMENDMENT AND DISCONTINUANCE
The Corporation expects to continue this Plan indefinitely, but
reserves the right, by action of the Board, to amend it from time to time or to
discontinue it. However, if the Board should amend or discontinue this Plan, the
Corporation shall remain obligated under the Plan with respect to (1) Awards
made final (and thus payable) by decision by the Committee prior to the date of
such amendment or discontinuance, (2) Awards and rights of any Participant or
beneficiary with respect to whom a Vesting Event has occurred.
Executed as of this 30th day of December, 1999 at Louisville,
Kentucky.
NATIONAL PROCESSING COMPANY
By: /s/Robert G. Siefers
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