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Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement made and entered
into this 22nd day of December, 2008 (the "Effective Date") by
and between Fiserv, Inc., a Wisconsin corporation (the "Company"),
and Jeffery W. Yabuki (the "Executive").
WITNESSETH:
WHEREAS, the Executive and the Company entered into an
employment agreement on November 7, 2005; and
WHEREAS, the Executive and the Company desire to amend and
restate the employment agreement to comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code) and to eliminate certain historic provisions that are
no longer applicable.
NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties agree as follows:
1. Term of Employment .
1.1 The Executive shall commence employment with the Company on
December 1, 2005, or such earlier date mutually agreed upon by
the Executive and the Company ("Employment Date").
1.2 Commencing on the Employment Date, the Company agrees to
employ the Executive, and the Executive agrees to accept such
continued employment and serve the Company, in such capacities,
with such duties and authority, for such period, at such level of
compensation and with such benefits, and upon such other terms and
subject to such other conditions, as are hereinafter set forth. The
term of Executive’s employment shall commence on the
Employment Date, and end on December 31, 2009, subject to
earlier termination or further renewal as provided in this
Agreement (the "Term of Employment").
1.3 Renewal . Executive’s Term of Employment shall
automatically renew for subsequent one (1) year periods,
subject to the terms of this Agreement, unless either party gives
written notice 90 days or more prior to the expiration of the then
existing Term of Employment of Executive’s or the
Company’s decision not to renew. A decision by the Company
not to renew other than as a result of Executive’s death or
Disability (as defined below), and other than in circumstances
which would give rise to a termination for Cause (as defined
below), shall be treated as a Termination by the Company without
Cause and so governed by Paragraph 6.3.5 below. A decision by the
Executive not to renew, other than for Good Reason (as defined
below), shall be treated as a Voluntary Resignation, and so
governed by the provisions of Paragraph 6.3.4 below.
2. Capacities, Duties and Authority
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2.1 During the Term of Employment, the Executive shall serve as
the Company’s President and Chief Executive Officer and as a
member of the Company’s Board of Directors (the "Board"). The
Executive shall report directly to the Board, and shall direct and
manage the affairs of the Company with such duties, functions and
responsibilities as contemplated by the Company’s by-laws and
as the Board shall designate, provided that such duties, functions
and responsibilities are commensurate with the Executive’s
positions of President and Chief Executive Officer.
2.2 The Executive shall serve the Company faithfully,
conscientiously and to the best of the Executive’s ability
and shall promote the interests and reputation of the Company.
Unless prevented by sickness or Disability or during a period of
vacation or other approved leave of absence, the Executive shall
devote substantially all of the Executive’s time, attention,
knowledge, energy and skills, during normal working hours, and at
such other times as the Executive’s duties may reasonably
require, to the duties of the Executive’s employment,
provided, however, that it shall not be a breach of this Agreement
for the Executive to manage his own private financial investments
or to serve on civic or charitable boards, to continue to serve on
the corporate boards on which Executive serves as of the Effective
Date, or to be a member of the board of directors of other
companies which do not compete with the Company, so long as such
directorships have been expressly disclosed to, and approved by,
the Board, and provided, further, that all such activities do not
materially interfere with the Executive’s performance of his
duties hereunder, cause harm or concern to the Company’s
operations, profitability or reputation, or otherwise violate this
Agreement.
2.3 The Executive represents and warrants that he is not a party
to, or otherwise bound by, any agreement, covenant or other
restriction that would in any way conflict with or limit his
ability to perform his duties hereunder.
3. Compensation .
3.1 The Executive shall be paid a base salary at the annual rate
of $840,000.00, payable semi-monthly and otherwise in accordance
with the regular payroll practices of the Company. At least
annually, during the Term of Employment, the Company’s
Compensation Committee shall consider and appraise the
contributions of the Executive to the Company, at such time as the
contributions of other senior executives of the Company and
adjustments to base compensation are considered or made, and due
consideration shall be given to the upward adjustment of the
Executive’s annual base salary, which evaluation and
adjustment to base compensation shall be done at such time as the
salaries of the other senior executives of the Company are
evaluated. During the Term of Employment, Executive’s base
salary shall not be decreased.
3.2 The Executive shall be eligible to participate in the
Company’s Executive Incentive Compensation Plan and any
replacement or successor annual bonus plan (the "Annual Bonus
Plan"), and, effective January 1, 2008, be eligible to receive a
target bonus equivalent to not less than one hundred twenty-five
percent (125%) of Executive’s base salary for attainment
of performance goals or other criteria, terms and conditions as may
be established by the Company’s Compensation Committee in
accordance with the Annual Bonus Plan, with an opportunity to earn
a bonus in excess of target based upon above-target performance in
accordance with the Annual Bonus Plan.
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3.3 Equity and Long-Term Grants . The
Executive received or shall receive from the Company equity and
long-term grants as follows:
3.3.1 On the Employment Date, the Executive received from the
Company: (i) a grant of 145,000 stock options, which will
expire ten (10) years after the grant date and will vest over
a five (5) year period, twenty percent (20%) on each
anniversary of the grant date; (ii) a 45,000 share restricted
stock grant with three (3) year cliff vesting and
performance-based vesting based on specified earnings per share
targets for 2006; (iii) a grant of 7,849 shares of restricted
stock with three (3) year cliff vesting and performance-based
vesting based on specified earnings per share targets for 2006; and
(iv) a grant of 225,000 stock options, which will expire ten
(10) years after the date of grant and will vest over a three
(3) year period, one third (1/3) on each anniversary of
the grant date.
3.3.2 The grants set forth in Paragraph 3.3.1 were made under
the Company’s Stock Option and Restricted Stock Plan as
approved at the Company’s 2005 Annual Meeting of Shareholders
(the "SORSP") and evidenced by award agreements substantially in
the form provided to Executive prior to the Employment Date. The
grants set forth in Paragraph 3.3.1 were awarded to Executive in
substantial part to compensate the Executive in lieu of
compensation the Executive had to forego due to his resignation
from his prior employer.
3.3.3 Commencing in 2006, Executive shall be eligible for and
shall receive grants of options and/or restricted stock and/or
other equity and long-term awards under the Company’s
long-term incentive compensation program, which are commensurate
with his position and are made at such times and on such terms as
grants and awards are made to the Company’s senior executive
officers generally; provided, that with respect to grants and
awards, if any, to be made in 2006, there shall be taken into
consideration the 145,000 stock options granted to Executive
pursuant to Paragraph 3.3.1.(i) above.
3.4 The Executive shall be entitled to take annual vacation
without loss or diminution of compensation, not exceeding four
(4) weeks, such vacation to be taken at such time or times,
and as a whole or in increments, as the Executive shall elect,
consistent with the reasonable needs of the Company’s
business and such vacation policies as may be established by the
Board. The Executive shall further be entitled to the number of
paid holidays, and leaves for illness or temporary disability in
accordance with the policies of the Company for its senior
executives, as the Company may amend or terminate such policies
from time to time in its sole discretion.
4. Employee Benefit Programs .
4.1 During the Employment Period, the Executive shall be
eligible to participate in and shall have the benefit of all the
Company’s group medical, dental and vision plans and
programs, group life and disability insurance plans, the
Company’s 401(k) plan, and other employee benefit plans and
standard benefits as are or may be generally made available to
senior executives of the Company.
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4.2 Except as otherwise expressly provided in
this Agreement, nothing in this Section 4 shall be construed
to require the Company to establish, maintain or continue any
compensation or benefit plan, program or arrangement.
4.3 Except as otherwise expressly provided by their terms, such
compensation or benefit plans, programs or arrangements are subject
to modification or termination by the Company at any time.
5. Change in Control of the Company .
5.1 Simultaneous with his execution of this Agreement, Executive
will execute a Double Trigger Key Executive Employment and
Severance Agreement substantially in the form provided to the
Executive prior to the date hereof (the "Double Trigger KEESA"). In
the event of a "Change in Control of the Company," as defined under
the Double Trigger KEESA, during the Term of Employment, the
Executive shall be entitled to the benefits of the Double Trigger
KEESA, provided that if the benefits under the Double Trigger KEESA
are duplicative of benefits provided under this Agreement, the
Executive shall receive only the most favorable benefits
(determined on a benefit-by-benefit basis) under the Double Trigger
KEESA and this Agreement; and provided, further, that in the event
that after such Change in Control the Executive’s employment
is terminated by the Company without Cause or the Executive
voluntarily terminates his employment with the Company for Good
Reason, the Executive shall be entitled to a gross up payment
determined as set forth in Paragraph 5.2 below.
5.2 Excise Tax Gross-Up .
5.2.1 In the event that any payment or benefit received or to be
received by the Executive pursuant to the terms of this Agreement
(the "Contract Payments") or of any other plan, arrangement or
agreement of the Company or its subsidiaries ("Other Payments" and,
together with the Contract Payments, the "Payments") would be
subject to the excise tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") as determined as provided below, the Company shall pay
to the Executive, at the time specified in Paragraph 5.2.3, an
additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of the Excise Tax on
Payments and any federal, state, local income and employment tax
and the Excise Tax upon the Gross-Up Payment, and any interest,
penalties or additions to tax payable by the Executive with respect
thereto, shall be equal to the total present value (using the
applicable federal rate as defined in Section 1274(d) of the
Code in such calculation) of the Payments at the time such Payments
are to be made.
5.2.2 For purposes of determining whether any of the Payments
will be subject to the Excise Tax and the amounts of such Excise
Tax, (1) the total amount of the Payments shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2)
of the Code, and all "excess parachute payments" within the meaning
of Section 280(G)(b)(1) of the Code shall be treated as
subject to the Excise Tax, except to the extent that, in the
opinion of independent counsel selected by the Company and
reasonably acceptable to the Executive ("Independent Counsel"), a
Payment (in whole or in part) does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code,
or such "excess parachute payments" (in whole or in part) are not
subject to the Excise Tax, (2) the amount of the Payments that
shall be treated as subject to the Excise Tax shall be equal to the
lesser of (A) the total
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amount of the Payments or (B) the amount of
"excess parachute payments" within the meaning of
Section 280G(b)(1) of the Code (after applying clause
(1) hereof), and (3) the value of any non-cash benefits
or any deferred payment or benefit shall be determined by
Independent Counsel in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed
to pay federal income taxes at the highest marginal rates of
federal income taxation applicable to the individual in the
calendar year in which the Gross-Up Payment is to be made (which,
for this purpose, shall include any additional income tax imposed
under Section 409A of the Code with respect to the amount of
the Payments or Gross-Up Payment subject to such additional income
tax) and state and local income taxes at the highest marginal rates
of taxation applicable to individuals as are in effect in the state
and locality of the Executive’s residence in the calendar
year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes that can be obtained from
deduction of such state and local taxes, taking into account any
limitations applicable to individuals subject to federal income tax
at the highest marginal rates.
5.2.3 The Company shall pay the Executive (or pay on
Executive’s behalf to the Internal Revenue Service) the
Gross-Up Payment provided for in Paragraph 5.2.1, if any, at such
time as the Executive is required to remit the Excise Tax to the
Internal Revenue Service or such Excise Tax is required to be
withheld under applicable law (but based on Executive’s
actual rate of taxation).
5.2.4 If it is established pursuant to a final determination of
a court or an Internal Revenue Service proceeding or if it is the
opinion of Independent Counsel that the Excise Tax is less than the
amount taken into account under Paragraph 5.2.2 hereof, the
Executive shall repay to the Company within thirty (30) days
of the Executive’s receipt of notice of such final
determination or opinion the portion of the Gross-Up Payment
attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax and any federal, state,
local income and employment tax imposed on the Gross-Up Payment
being repaid by the Executive if such repayment results in a
reduction in Excise Tax or any federal, state, local income and
employment tax deduction) plus any interest received by the
Executive on the amount of such repayment. If it is established
pursuant to a final determination of a court or an Internal Revenue
Service proceeding or if it is the opinion of Independent Counsel
that the Excise Tax exceeds the amount taken into account hereunder
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional Gross-Up Payment in respect of
such excess within thirty (30) days of the Company’s
receipt of notice of such final determination or opinion. In the
event of any change in, or further interpretation of, Sections 280G
or 4999 of the Code and the regulations promulgated thereunder, the
Executive shall be entitled, by written notice to the Company, to
request an opinion of Independent Counsel regarding the application
of such change to any of the foregoing, and the Company shall use
its best efforts to cause such opinion to be rendered as promptly
as practicable.
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6. Termination of Employment .
6.1 The Executive’s employment hereunder shall
terminate:
6.1.1 upon the death of the Executive;
6.1.2 upon the "Disability" (as defined below) of the Executive,
effective upon the giving of a written Notice of Termination in
accordance with Paragraph 6.2 below, if and only if, during the
Term of Employment, as a result of the Executive’s disability
due to physical or mental illness or injury (regardless of whether
such illness or injury is job-related) which qualifies as a
disability under the Company’s long term disability plan
("Disability"), the Executive shall have been absent from the
Executive’s duties hereunder on a full-time basis for a
period of six consecutive months, and, within thirty days after the
Company notifies the Executive in writing that it intends to
terminate the Executive’s employment (which notice shall not
constitute the Notice of Termination described in Paragraph 6.2),
the Executive shall not have returned to the performance of the
Executive’s duties hereunder on a full-time basis;
6.1.3 at the option of the Company, and subject to the
Executive’s rights to notice and opportunity to cure as set
forth in Paragraph 6.2 below, for Cause, effective on a date
specified in the Notice of Termination. For purposes of this
Agreement, "Cause" shall mean any of the following:
(a) the Executive’s dishonesty or similar serious
misconduct directly related to the performance of Executive’s
duties and responsibilities hereunder, which results from a willful
act or omission and which is materially injurious to the
operations, financial condition or business reputation of the
Company;
(b) the Executive’s conviction of a misdemeanor involving
moral turpitude or of a felony;
(c) Executive’s drug or alcohol abuse which materially
impairs the performance of his duties and responsibilities as set
forth herein;
(d) substantial continuing willful and unreasonable inattention
to, neglect of, or refusal by Executive to perform
Executive’s duties and responsibilities under this
Agreement;
(e) the Executive’s willful or intentional material
violation of a material provision of the Company’s Code of
Conduct, as it may be amended from time to time, or other material
Company policies in effect from time to time; or
(f) any other willful or intentional material breach or breaches
of this Agreement by Executive.
6.1.4 at the option of the Company, for a reason other than
death, Disability or Cause, effective upon the giving of a Notice
of Termination in accordance with Paragraph 6.2 of this
Agreement;
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6.1.5 at the option of the Executive, and subject
to the Company’s rights to notice and opportunity to cure as
set forth in Paragraph 6.2(d) below, for Good Reason. For purposes
of this Agreement "Good Reason" shall mean the occurrence at any
time of any of the following without the Executive’s prior
written consent:
(a) any breach of this Agreement by the Company, other than an
insubstantial and inadvertent failure not occurring in bad faith
that the Company remedies promptly after receipt of notice thereof
given by the Executive;
(b) any reduction in the Executive’s base salary,
percentage of base salary available as incentive compensation or
bonus opportunity;
(c) the removal of the Executive from, or any failure to reelect
or reappoint the Executive to, any of the positions set forth in
Paragraph 2.1, except in the event that such removal or failure to
reelect or reappoint relates to the termination by the Company of
the Executive’s employment for Cause or by reason of
Disability;
(d) a good faith determination by the Executive that there has
been a material adverse change, without the Executive’s
written consent, in the Executive’s working conditions or
status with the Company, including but not limited to (A) a
significant change in the nature or scope of the Executive’s
authority, powers, fu
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